SEC. RUMSFELD: Thank you, Mr. Chairman (Carl Levin D-MI) and Senator (John) Warner (R-VA) for your comments. Senator (James) Inhofe (R-OK), I have a -- certainly recognize the interest you've shown in the Army in artillery and commend you for it.

And I certainly thank all of you for the opportunity to discuss the department's recommendation to terminate the Crusader program, to continue some of the Crusader technologies, and to move funds to technologies and programs that we believe will better serve the country.

President Bush has said, "I expect the military's priorities to match our strategic vision, not the particular visions of the services, but a joint vision for change. I will direct the secretary of Defense to allocate these funds to new programs that do so. I intend to force new thinking and hard choices."

That statement was not made in the context of the Crusader decision; it was made as governor back at the Citadel in September of 1999, when he told the American people what he planned. And we are purposefully pursuing that goal.

On that day in 1999 the president warned that we are witnessing a revolution in the technology of war, that power is increasingly defined not by size, he said, but by mobility and swiftness. Influence is measured in information. Safety is gained in stealth. And forces are projected on the long arc of precision-guided weapons.

What took so long to put structure behind the president's vision, a vision he laid out plainly for all to see, and a vision I discussed with this committee during my confirmation hearings in January of 2001? I remember the clamor throughout 2001 and into early this year to get on with the tough decisions, as though transformation of our armed forces could be measured in terms of which programs were killed, or how fast it was done. In testimony before this committee I said we would engage our brains before engaging the taxpayers' pocketbooks. We said we'd be deliberate, not rushed, and that we preferred to get it right.

The decision to recommend termination of the Crusader was not reached precipitously, as some recent commentary has suggested, but after months of review, wide-ranging discussion, and in-depth planning and analysis, a review not just of the Crusader program, but of future capabilities, of the strategy to guide us, and of the framework for assessing and balancing risks. The senior leaders of this department, military and civilian, service chiefs, service secretaries, the chairman, the vice chairman, the undersecretaries and I spent countless hours -- I have not bothered to add them up, but it was day after day after day, several hours a day -- discussing strategies, capabilities, threats and risks. And that process started well before September 11th. Tragically, September 11th confirmed many of our conclusions. I will recount some of that process so that the proper context for the Crusader decision can be better understood.

President Bush shaped the context, the direction of that process in those remarks at the Citadel. He talked about an era of proliferation of missile technology and weapons of mass destruction, an era of car bombers, plutonium merchants, of cyberterrorists and dictators. He cautioned of barbarism emboldened by technology. These challenges, he said, can be overcome, but they cannot be ignored. And the best way to keep the peace is to re-define war on our terms. We must shape the future with new concepts, new strategies, and new resolve.

If elected, he said, he would initiate a comprehensive review of our military, the state of its strategy, the priorities of procurement. He talked about the opportunities to skip a generation of technologies. In the future, he said, we may not have months to transport massive divisions to waiting bases or to build new infrastructure on site. He said our forces in the next century must be agile, lethal, readily deployable, and require a minimum of logistical support. We must be able to project power over long distances in days or weeks rather than months. Our military must be able to identify targets by a variety of means from marine patrol to a satellite, and then be able to destroy those targets almost instantly with an array of weapons. On land, our heavy forces must be lighter, our light forces must be more lethal, all must be easier to deploy, and these forces must be organized in smaller, more agile formations.

Still later he spoke of emerging threats and re-enforced the need to prepare for the future. "Keeping America safe," he said, "is a challenge that's well within our reach if we will work together to shape the budgets, the programs, strategies and force structures necessary to meet the threats we face and those that are emerging," unquote. It was a direction and an urgency that I underscored in my testimony before this committee last June 21st, warning that the new technology of war is advancing, not in decades, but in months and years, and that we must take advantage of the time we have to prepare for the challenges we are sure to face in the years ahead.

And last year we began to put that thinking into action. Last May the department's senior leadership, civilian and military, began intensive discussions about where America's military should go in the years ahead, and we agreed on the need for real changes in U.S. defense strategy. The outline of those strategies -- changes is reflected in the Quadrennial Defense Review, and among the new directions set in the QDR, the following are perhaps the most important.

First, that we moved away from the two major-theater war planning construct, which called for maintaining forces capable of nearly simultaneous marching on and occupying the capitals of two regional adversaries and changing regimes. Today's new approach emphasized deterrence in four critical theaters, backed by the ability to swiftly defeat two aggressors in the same time frame while preserving the option for one major offensive to occupy an aggressor's capital and replace the regime. And it calls for the ability to execute several lesser contingencies as well. By making this adjustment, we gain more flexibility in planning for a wider array of contingencies, and we gain flexibility for investing in the future.

Second, the senior civilian and military leaders agreed on a new framework for assessing risk. We agreed that couldn't judge a program simply by how it addressed near-term war-fighting risks. A new framework was required, one that would put other types of risks up on the table as well.

Second, operational risks, which concern the ability of forces to accomplish the missions called for in the near-term military plans.

Future challenge risks, number three, which addresses the investments and changes needed to permit us to meet military challenges in the mid- to more distant future.

And last, institutional risk, which involves inefficient processes and excessive support requirements that hinder our ability to use our resources efficiently.

The approach we adopted sought to balance those various risks in all of those categories and to avoid the extreme solutions that would lower risks in some areas while raising other risks to unacceptable levels.

That is not easy to do. It is very difficult to do. It's very easy to balance the Paladin, for example, against the Crusader. It is quite a different thing to balance that question, that issue, if you will, against health care or pay to maintain the force that we need to attract and retain; against transformation, the need to invest for the future. The department does apples-to-apples balancing of risk rather well. Historically, the department has not done very well in balancing the different types of risk, the four types that I've just characterized.

While it's understandable and expected that reasonable people may differ on specific decisions regarding a given investment or a budgetary decision, it is critically important to understand the need to balance among those different categories of risks that we confront today, because it bears directly on the Crusader decision.

Third, to contend with a world of surprise and uncertainty, we're shifting our planning from a threat-based model that has guided DOD thinking in the past to a capabilities-based model for the future. We can't know precisely who may threaten us or when or where, but we can know what sort of capabilities we may be threatened with and how. And we can also determine which capabilities we are most likely to provide with the important new advantages.

Fourth, to support our capabilities-based approach to force planning, we worked to focus transformation efforts by defining goals.

Historically, successful cases of transformation have occurred in the face of compelling strategic and operational challenges.

As the president foresaw, U.S. ground forces must be lighter, more lethal and highly mobile. They must be capable of insertion far from traditional ports and air bases. They must be networked to leverage the synergy that comes from combining ground-maneuver forces with long-range precision fire. Air forces, manned and unmanned, must be able to locate and track mobile targets persistently over vast areas and strike rapidly at long range without warning.

The point is not to substitute air power for ground power, as some critics have demanded. Instead, it's the asymmetric opportunity that comes from integrating ground, air, maritime and space capabilities in a networked web of forces. Today forces are operating jointly in ways that were unimaginable before the information and telecommunication revolution.

The fiscal year '03 budget request before you now draws from many of the things we learned in developing the Quadrennial Defense Review. Developing defense systems against asymmetric threats are one area that we have provided increase in that budget. A second is accelerating the fields of unmanned aerial vehicles. A third is converting Trident submarines to new -- to conduct new missions. A fourth is developing advanced communications, including laser communications, to deliver fiber optics-quantity broadband to U.S. forces. Next is accelerating the introduction of near real-time secure and joint data links. And last, we're accelerating the field of a variety of new precision munitions. These leveraging investments in surveillance, reconnaissance, integration, networking and precision strike are signposts of the future transformational force.

There are a number of new transformation starts in this budget, most of which will not reach fruition within the planning horizon of '09. As new transformation initiatives mature, we have to be prepared to make adjustments in programs to take advantage of successes, and we have to be willing to move beyond those of less interest as time passes. In doing so, we need to balance between the need to be ready for war tomorrow, which is important, and also the need to be prepared for future wars.

As part of this transformation effort, we're taking steps to shift the balance of weapons inventory to emphasize precision weapons, weapons that are precise in time, space and in their effects. In that regard, the department is developing a range of new conventional, precision and miniature munitions for attacking mobile targets, targets in urban areas, and for defeating chemical and biological weapons.

Resources are always finite. Tough choices have to be made. Such choices are generally not made between good and bad or needed and not needed, or even between what's wanted and not wanted. Tough choices are made at the margin, often between programs that are both desirable and both wanted. But nonetheless, choices have to be made, and the American people know that. They make choices every day. It isn't what's -- whether something's good or nice or wanted; it's a question of what choice is best when resources are finite.

Also, this year's Defense budget increase is the largest in a long time. Virtually the entire increase was spoken for, to cover inflation, must-pay bills for health care and pay raises, to correct unrealistic costing of readiness and procurement from past budgets, funding the global war on terror.

Some 9.3 billion in resources has been shifted by terminating a number of programs.

Major terminations included the DD-21 destroyer program, which has been replaced by a restructured DDX that will develop a new family of surface combatants with revolutionary improvements in stealth, propulsion and other technologies.

As we put together the fiscal '03 budget that's now before you, many major programs, including Crusader, required review. As I've described, most of last year was spent developing the strategic framework within which to consider individual programs against required capabilities. This February we began developing the defense planning guidance for fiscal year 2004 budget and the fiscal year 2004-2009 program.

If you could put this board up that shows the time line, it's been suggested that this decision was made in the midst of a congressional consideration of the various pieces of our budgets that are before the Congress. If you look at that, the black represents what the Department of Defense is working on in our locations; the red indicates what the Congress is working on at any given time. And as you can see, the Congress was working on the '02 budget authorization, then the appropriation, almost simultaneously an '01 supplemental. The Pentagon was working on the QDR, the '03-'07 budget, and then the '03 budget itself; the Congress was working on the '03 budget authorization and appropriation. A supplemental came up. Then we started working on the '04-'09 budget while the Congress was still working on the '02 supplemental, the '03 budget authorization, and the '03 appropriation.

It turns out there are about 27 days since I've been secretary of Defense when we could make decisions that would not occur at a time when one of the branches of the Congress was working on either a supplemental or an authorization or an appropriation. Now, if we had two-year budgets, that wouldn't be the case. It would be possible. But given the situation we're in, I don't know how in the world we could make a decision down there that would not at some point conflict -- or, not conflict, but occur at a time that seems awkward from the standpoint of the Congress. And I recognize that. I just don't know what the answer to it is.

One of the things we got working on when we addressed the '04 budget and the planning guidance for it and the '04-'09 program, as the senior civilian and military leadership met, we focused on the bow wave problem. If you'll look out and think of the '02 to -- correction, the '03-'07 budget, which is up, and then add a year, but you add two years at the end. And what happens is, if you look, if every program we have is continued to be funded the way it's currently programmed, including the Crusader, the bow wave just goes up like this. And the time to deal with that is not in two or three years, to try to deal with it, because then it's too late. You've got all of these investments. The only way to do it is to address it now, and to do it, and to make the tough choices which have to be made.

The issue of dealing with the bow wave that we face requires decisions that we have to make as early as possible. People have said, gee, why did you do this now, why didn't you do it later -- or earlier? Well, it would have been nice if we had done it earlier. It'd be nice if you could do it later. But the fact of the matter is, you do it when you can do it, you do it when you reach the best judgment you can. And that is, in the last analysis, going to save the most money and have the least disruption on people involved in the activities involved with that particular program.

I'd like to mention a couple of lessons from Operation Enduring Freedom that have a bearing on this issue as well, Mr. Chairman. You asked about what changed. Well, since last fall, the department has been compiling some insights from the war in Afghanistan, and I wouldn't want anyone to think that the war in Afghanistan had lessons that determine where every weapon system should be handled in a certain way. It doesn't, and I know that. But there are some things that it seemed to me are worth looking at.

First is flexibility. The war in Afghanistan was not a war that the U.S. forces had planned to fight. There was no war plan on the shelf. There were no pre-positioned stocks of equipment, of basing agreements with neighboring countries. The United States went to war on the fly because we had to. U.S. forces will be confronted with future surprises, let there be no doubt, and that will require flexibility.

Second is speed of deployment and employment. Rapidly deployable and employable forces have served as the vanguard force in Afghanistan. Air, ground, maritime forces that could enter the theater quickly proved the most valuable in the initial phases of the war. Future wars are also likely to require a swift U.S. response to defeat aggression. As in this case, U.S. forces may not have the luxury in future contingencies of long lead times for deployment.

Restricted access. Given the limited access to basing in the region, especially adjacent and within Afghanistan, systems that can only enter the fight through large ports or airfields were of limited utility. The infrastructure in many areas of the world will not permit oversized systems to be inserted. Moreover, as more and more adversaries acquire the means to deny U.S. forces traditional access through man-portable air defenses, ballistic missiles, mines, cruise missiles, chemical and biological weapons, U.S. forces will likely have to enter through non-traditional avenues, such as over beaches, through mountains and smaller landing areas and airfields.

Next is integration of ground and air. One of the most powerful lessons from the war has been the power that comes from the combination of forces on the ground and long-range airpower. Having U.S. forces on the ground early in Afghanistan contributed directly to success. We saw soldiers armed with rifles maneuvering on horseback using advance communications to direct strikes by 50-year-old bombers. The integration of ground and airpower can, in some circumstances, allow small teams on the ground to achieve effects far beyond their numbers. Next, precision. A final lesson is that precision matters and it matters a lot. In many cases, U.S. Special Forces on the ground were calling in long-range bombers to provide tactical close-air support. This had never been done before. Precision allowed forces on the ground in the heat of battle to call in airstrikes close to their own positions. It reduced the number of friendly fire incidents, as well as incidents of civilian collateral damage. At the same time, precision meant that fewer weapons needed to be fired. Precision munitions accounted for roughly 65 percent of the total number of munitions used so far in the Afghanistan war, compared to 30 percent in Kosovo and compared to 7 percent in Desert Storm. So in a decade, we've gone from 7 percent to 30 percent to 65 percent -- close to two- thirds. The trend is clear: Increasingly the munitions that U.S. forces -- air, sea and ground -- employ will need to be precision guided.

In light of these lessons -- the tenets of the new defense strategy, the analysis of the future budgetary situation -- the senior leadership considered the case of Crusader.

And it's against that backdrop, it seems to me, that it's important that we consider this decision.

The decision to recommend termination is not about killing a bad system. Crusader is potentially a good system. We know that. It's not about a system that couldn't be used; it could be used. And it's not about a system that the Army would not like; the Army would like it. But the issue is, how do we balance the risks? And in short, it's about foregoing a system that was originally designed in a different strategic concept -- context to make room for more promising technologies that can accelerate transformation.

Let there be no doubt: When fielded early in the next decade, Crusader would have represented a measurable improvement over the existing Paladin howitzer in both the rate of fire and the speed of maneuver. Now that was what the requirement was: rate of fire and maneuver. Precision, interestingly, when this -- when Crusader was validated as a requirement, precision was not part of the picture.

Now really, what ought to be validated as a requirement is an outcome for a combatant commander in a given theater in its area of responsibility. And clearly, precision needs to be factored into it. And we're convinced that it's better to invest that money where it can be used to prove the truly transformational capabilities -- capabilities such as increased accuracy, more rapid deployability and the ability to network fires that will make the Army indirect-fire systems effective and relevant on the battlefields of the 21st century.

There's been a lot of talk about the weight of the Crusader. And I think it's useful to get it up. The Crusader was up in the 60-ton neighborhood, is the way they did it, which was about -- oh, goodness. That was some period back, and that's the only one that exists today. There's not a 40-ton Crusader. There's not a prototype of that yet. It has not been sized down, although it's undoubtedly doable.

However, the problem is that when you add the armor back on and the ammunition and the fuel and the people and the ammunition you need in the vehicle that goes with it, it isn't 40 tons or 60 tons; it's 97 tons. That is a lot! And it seems to me it's important to have that in mind. I asked, "How many C-17s would it take to move 18 Crusader tubes into a battle?" And the answer was "Sixty to 64 C-17s to move 18 Crusader tubes into a battle." That's a bucket. That's half of the entire C-17 fleet, plus or minus 10 percent. (Isolated chuckling.) The debate about the Crusader is about whether to spend roughly 9 billion more to procure some 480 Crusader howitzers or instead to use funds to accelerate a variety of precision munitions, including GPS- guided rounds for all U.S. 155-millimeter cannons, as well as adding GPS guidance and accuracy to upgraded multiple-launch-rocket-system vehicles and the more mobile wheeled version of this system, the high- mobility artillery rocket system, or HIMARS.

Transforming to give our country the capabilities that revolutionary changes in technology offer and to enable us to fight and win the nation's wars in the 21st century as effectively as we did in the last century, I think, requires some choices and some decisions.

And the hardest of those which I said about balancing risks between the challenges we face in the near term, in the mid-term, to those less certain -- and, indeed, I would, Mr. Inhofe, point out, less certain and vastly more difficult to analyze -- issues that we face in the longer term. That was the choice we have made in recommending terminating Crusader and shifting the funding into programs that are more appropriate, we believe, for the future.

It's not an indication that the U.S. should do without ground forces, as some have suggested. That's nonsense. To the contrary, it's a decision that reflects confidence in the U.S. Army that has set a course over the longer term that we believe is a good course and, indeed, needs to be accelerated, and probably can be accelerated, to shorten the period between the current time and when the Future Combat System could come in. Nor is it a decision that the future Army can manage without indirect fire and rely solely on air support. Rather, it's a decision that precision in artillery and rocket fires can be as revolutionary as it has already proven in air-delivered weapons and that mobility and rapid deployability will be crucial in the future, not only in getting to the battlefield, but in maneuvering over potentially vast battle areas. In short, it was a decision about balancing risks, a decision that was made after long and careful consideration.

I saw an article this morning that was mentioned, and Senator Warner said he was going to have it inserted in the record, by a retired general that tried to compare this period to the period after World War II. Well, I'm old enough to remember most of that. And I'll tell you, after World War II the Army budget was being cut by 80 percent. During this period, this administration, we've proposed increasing the Army budget by 21 percent. There is no comparison between those two periods. This is not, as was suggested in that article, a comparable basis for comparison.

The defense strategy established last year in the Quadrennial Defense Review emphasized the need for U.S. forces to demonstrate an ability to swiftly and surely defeat adversaries in distant theaters, and by so doing and being capable of so doing, to deter them in the first instance. In particular, this strategy confirmed the need for ground forces that are lighter, more lethal, and more readily deployable in today's force. Throughout the conflict in Afghanistan we've seen the remarkable synergy between ground and air forces. And if nothing else, Operation Enduring Freedom has demonstrated some of the advantages that can be achieved with joint integrated approaches to warfare. Not only is the safety and effectiveness of our troops improved; the result is the rapid and precise destruction of enemy forces. We know that ground operations will continue to be a critical dimension of warfare, and that accurate indirect fires will continue to play an important role in deterring and defeating a range of potential adversaries.

In light of the new defense strategy and the initial insights from the war, the senior leadership weighed the relative merits of Crusader against other alternatives to meet the Army's need for organic indirect fire, both cannon and rocket. Following extensive discussion and evaluation, it became apparent that on balance alternatives to Crusaders would be more consistent with both the new defense strategy and with the Army's overall transformation effort. Today revolutionary improvements in indirect fire systems appear to be within reach and offer potentially reasonable alternatives to Crusader, an alternative that could provide greater precision, more rapid deployability, and the ability to integrate fires.

Precision means that fires are more lethal and more able to attack targets more rapidly before they can attack or move and disappear. Precision also means fewer rounds are expended to defeat a given target. And therefore, importantly, the logistical burden is reduced, and that is a critical pacing element. Logistics are vital, and this provides greater ability to deploy an effective force quickly. And of critical importance, precision can enable us to reduce collateral damage and make it considerably more difficult for enemies to hide in concentrated population centers, a problem which we've faced in Afghanistan.

Accelerating the development of satellite-guided artillery shells, such as Excalibur munitions and the guided multiple launch system, could bring the precision revolution we have witnessed in airpower to the U.S. Army. And we're also considering the possible acceleration of highly mobile and more readily deployable indirect fire systems, such as the High Mobility Artillery Rocket System. This system could be easily transported in the smaller C-130 aircraft, and that mobility means it could keep pace with other vehicles in the Army's planned objective force.

In short, the decision to recommend that we skip Crusader is one that emphasizes accelerating a shift to precision munitions of all indirect fire systems -- canon as well as rocket, Marine Corps as well as Army. Our recommendation is not to abandon the technologies already developed by the Crusader program. In fact, it would ensure that the key pieces of Crusader technology are maintained for use in both the Army's Future Combat System and possibly in the Advanced Gun System that the Navy is developing for its future surface combatants.

In the near- to mid-term, however, our conclusion is that accelerating precision rounds for indirect fire will increase the overall capability of our forces more than the procurement of the 480 Crusaders. Skipping Crusader to emphasize these precision munitions and rocket systems does not put U.S. forces at risk, as some have suggested. Rather, we can reduce future risk by speeding the introduction of critical new capabilities.

This decision also invests in the future Army in integrated combined arms, greater deployability and lethality. The Army's objective force should represent not only a technological but also a conceptual and cultural change. The Crusader, by contrast, would have represented a weighstation in that change process. While a technological advancement over the Paladin howitzer, to be sure, it was conceived for a traditional mass force counterattack role. In short, we do not believe that it was critical to the Army's overall transformation effort, nor to the broader defense strategy.

By implementing this recommendation, we can ensure that the armed forces will continue to overmatch the capabilities of any potential adversary now and in the future -- not tank for tank, not aircraft for aircraft, not canon for canon, but asymmetrically. Rather than any single element alone, the combination of U.S. joint forces and precision can ensure that the U.S. maintains the advantage of the battlefield.

The senator is correct in his chart that there are artillery pieces that have some ranges that exceed Paladin. The way to look at it, however, it seems to me, is to look at all of the U.S. capabilities to bring firepower on a given target. And think of the range we have. We have the Paladin, we have the MLRS rockets, we have attack helicopters, we have cruise missiles, we have airpower from the Army, the Navy, the Air Force. We have a whole range of things that can be used in a joint way, and the task is not to look at a single one of them.

And I guess that the proof of that is to ask -- ask the generals and the admirals in any one of the countries that have a(n) artillery piece that has a slightly longer range whether they'd rather trade our ability to put power on a target for theirs. And the answer is, there isn't any in the world who would want to do that.

Some have raised concerns that these technologies are not far enough along. And to be sure, there's much work to be done, and I'm not here to oversell any one of them. But the C-130 transportable rocket system, the HIMARS, for example, is further along than the Crusader. Further, we have growing expertise in precision guidance systems, and we're using them to great effect. Taken together, the systems we're examining can offer greater improvements in precision and range and deployability. And we believe that by foregoing the Crusader, we have the opportunity to produce more advanced capabilities and ensure their earlier integration into the Army.

The question has to be asked, are the interim capabilities that the Crusader would have provided worth the delay in acquiring indirect fire systems that are, we believe, more transformational? There are certainly honorable Army generals who will say yes, and I respect that; but there are also honorable and knowledgeable Army generals who will advise you that we should press ahead with the new technologies.

I've been through this. Twenty-five years ago, they came into my office and said -- the Army said they wanted to have another diesel tank. The M-1 tank was proposed to be a diesel. And they showed up in my office at 7:30 at night, and it was unanimous. That's what they wanted. And we decided to go with a turbine tank. And you ask generals today whether or not they think the turbine tank was the right decision or the wrong decision, and most of them, I think, will tell you they think it was a good decision. And it's a fine tank and has done a good job.

So the task is the Army -- is to do what they do, and that is to make proposals up, as the Navy and the Air Force do. The combatant commander is not going to fight with the Army proposals or the Navy proposals or the Air Force proposals or the Marine proposals. They're going to fight joint. And they want to look at the totality of all of that and ask what can they do to prevail on the battlefield. And it's the task of the entire department, not one service, but the entire department to address those issues in an orderly and, hopefully, a thoughtful way. Mr. Chairman, for most of the last 50 years, the U.S. military has faced a fairly predictable set of threats. During the Cold War, we had one primary adversary, the Soviet Union. We came to know a great deal about that adversary, its strategies, its capabilities. We fashioned our strategies and capabilities accordingly. The resulting mix of U.S. weapons and forces allowed us to keep the peace and to defend freedom these many years.

Preparing for the future, however, requires a different strategy -- different forces, different capabilities, and a different way of thinking. And rather than static adversaries and threats, we face a new security environment in which surprise and uncertainty are the defining characteristics. We have to be prepared to adapt to an ever- evolving set of challenges and circumstances. We've entered a new age and we have to transform to meet it. To do so, we've got to prepare our forces to deter and defeat threats and adversaries that may not yet even have emerged.

I recognize that the decision to recommend cancellation comes at a time when Congress is considering the fiscal year 2003 budget request. Had it been possible, it would have been preferable to make it last year or next year; however, as I've said, at that time our focus was on developing the proper framework for the important program decisions we're making. We've reached our conclusion we did.

It's clear that continuing to fund a program we now know will not best met the mission would be irresponsible and a misuse of taxpayers' dollars. So we went ahead with the decision. And if there's one thing that September 11th has taught us, it's that we can no longer ignore the warnings of the past or delay preparation for the future.

In his 1999 speech at The Citadel, President Bush told the cadets, "I will not command the new military we create. That will be left to a president who comes after me. The outcome of great battles," he said, " is often determined by decisions on funding and technology made decades before, in periods of peace."

And President Bush also said to the Congress, "Join me in creating a new strategic vision for our military. Moments of national opportunity," he said, "are either seized or lost, and the consequences reach across the decades. Now comes the time of testing. Our measure is taken not only by what we have and use, by what we build and leave behind. And nothing this generation could ever build will matter more than the means to defend our nation and extend our freedom and peace."

I agree, and I look forward to working with the Congress and with this committee to ensure that the taxpayers' funds we invest and the systems we select will give our country the joint capabilities we will need. We need to work together to provide not simply what any one service may want, but rather, the joint war-fighting capability that will be necessary for our combatant commanders and our armed forces to deter and defend and contribute to the peace and stability that is so essential to our country's security in the next decade and beyond.

Thank you, Mr. Chairman.

SEN. LEVIN: Thank you, Mr. Secretary.

Secretary (Paul) Wolfowitz (Deputy Secretary of Defense) or Secretary (Edward)Aldridge, Undersecretary of Defense for Acquisition, Technology and Logistics) do you have any additional comment?

MR. WOLFOWITZ: Not at this time, Mr. Chairman.

SEN. LEVIN: Thank you.

Mr. Secretary, reference has been made to a article in this morning's Washington Post. A former chief of staff of the Army, General Gordon Sullivan, wrote a very strong article saying that the Crusader's the most technologically advanced ground combat system ever developed. And then he said the following -- and I'd like to just see -- I know you disagree with his conclusion, but I'd like to see if you disagree with the statement of facts of General Sullivan.

"The Crusader was designed from the ground up to fight in the digital-network-centered battlefield, to exploit information dominance. Its advanced robotic operations and automated ammunition- handling systems allow the crew, enclosed in a protected cockpit, to exploit information instead of straining muscles. The advanced composite hull, liquid-cooled gun and mobility of the system elevate the effectiveness of our forces by 50 percent, with a corresponding reduction in resources. Crusader covers and area 77 percent greater than current systems and has a 3-1 advantage in rate of fire."

And my specific question is, do you disagree with any of those specific facts? I know you have a different conclusion, and there's other facts that caused you to reach a different conclusion, but in terms of those facts, do you differ with them?

SEC. RUMSFELD: I think that my testimony indicated that I do agree with a great deal of that. There's no question but that the cockpit, the automatic loader, the software, the gun-cooling system all are technologies that can be, in some cases, looked at with respective potential future upgrades for Paladin. They can be looked at clearly and migrated to the future combat system. I guess the only thing I might disagree with was -- "it's the only system ever developed." It has not yet been developed. There still is not a Crusader that exists that has that characteristic, although those technologies, clearly, are under development.

SEN. LEVIN: Thank you. And I forgot to mention that we will proceed with an eight-minute round of questions, and we will follow our normal, early-bird order of recognition.

My next question is -- and I think you've acknowledged the fact that the Army does have a requirement for organic indirect-fire support; there seems to be no dispute about that.

I'm wondering whether or not the alternatives which you believe should be supported rather than Crusader can be developed and fielded as quickly -- or, put it this way -- on the same schedule as Crusader.

SEC. RUMSFELD: Could you put up this other chart?

SEN. LEVIN: If you could just kind of give us a yes or no, because we only have eight minutes. But are your alternatives planned to be developed and fielded as quickly as Crusader? That's my only question.

SEC. RUMSFELD: I can't give you a yes or no. I can show you the chart --

SEN. LEVIN: All right.

SEC. RUMSFELD: -- and the answer is, nobody knows quite when these things evolve. But if you look where Paladin is -- the green -- and you look where the yellow is -- that's Crusader -- the Future Combat System comes in somewhere between two and four or five years after the plan for Crusader. And the technologies from Crusader could be migrated back to Paladin in some instances or forward into the Future Combat System. So the Future Combat System would come in somewhat earlier.

I think that going back to General Sullivan's column, you're right about rate of fire. But he again ignores precision. And it seems to me precision is not something that one wants to leave out of the equation.

SEN. LEVIN: Let me ask you about that question. If that requirement was not included, or if that precision criteria was not included in the requirements, why weren't the -- why wasn't the Joint Requirements Oversight Council asked to review the requirement and to include precision? You didn't go back to them. Why not?

SEC. RUMSFELD: Well, I think it might be a good question to ask General (Peter) Pace, or even General (Eric) Shinseki. But the short answer is that the JROC exists, and it looks basically at the interoperability. And it does not -- it has not gone back to validate the requirement of rate of fire and mobility that was selected and used for the 1994 requirement with respect to Crusader. General Pace is determined to get JROC in a point where it can do what you're asking, but it is not currently organized, arranged, or even chartered to do it.

SEN. LEVIN: Thank you. Mr. Secretary, you described in your testimony a deliberative process, in particular which led to the decision to cancel Crusader. In particular, you said the following, that in "February of this year we began developing the defense planning guidance for the fiscal year 2004 budget and for the fiscal years 2004-2009 program." So you made references part of a deliberative process, this defense planning guidance. It's my understanding that as of April 29th the defense planning guidance process, which does include senior civilian and military leadership, had reached a very different conclusion from the one that you ultimately reached, that rather than deciding to cancel the Crusader program, that defense planning guidance process resulted in a decision to study alternatives to the Crusader over the next several months and to reach a decision on the future of the program by September of this year. Something changed between April 29th and May 2nd. And then again something changed between May 2nd and May 8th that led you to go from a five-month study to a 30-day, and then to immediate cancellation of the program. What changed? What specific things happened in those few days there which caused you to move from the defense planning guidance plan to complete that study by the end of September, then you announced a 30-day study, and then within a few days after that announcement cancelled the program?

SEC. RUMSFELD: The senior leadership that was working on the Defense Planning Guidance and I decided that we would decide what could be decided and have a Category I that said, "Do this," to the service. Go in this specific direction. Category II would be that they would go back and come back with several options of a different way to do it, and include this option, and then an option was described. A third bucket or basket was that they could go back and come back with some options, and there was no prescribed option. And the fourth was to come back with a plan to address how we might improve something that needs improving.

The decision as to which program should be put in which one of those baskets was something that was done towards the end of the Defense Planning Guidance process. I happened to be in Afghanistan and the neighboring countries during that week. Dr. Wolfowitz is here and can tell you whatever you might want to know about the way that process came to its closure.

SEN. LEVIN: Well, very specifically, as of April 29th, the plan was, you're going to give us a plan with alternatives by the end of September, including the possibility of cancelation. Then there was an announcement made there was going to be a 30-day study to come up with alternatives. Then that was truncated within a few days, and it was cancelled. What specific things changed during those few days to change from a September conclusion for a study to a 30-day conclusion for a study to a cancellation?

MR. WOLFOWITZ: Mr. Chairman, during the course of April, as we were working on the Defense Planning Guidance, it became increasingly clear that there were important alternatives to Crusader that had not been adequately surfaced during the course of preparing the '03 budget, specifically the alternatives that are being talked about here and which we'll be presenting shortly in a budget amendment. In fact, it was in that timeframe that I testified before this -- your committee, and when you asked me about Crusader, I summarized by saying, "I think my summary of Crusader is sort of a little bit in between. It is a system that brings us some dramatic new capabilities, but if we can bring forward some of the transformational capabilities more rapidly, we might see ways to put that Crusader technology into a different system."

In the middle of April, the secretary went with me and the three service secretaries, outlined the categories for how to treat major programs in the Defense Planning Guidance, as he just indicated to you. Crusader was clearly one of the ones that was being considered as a possible Category I, that is specific guidance, or a Category II, that is study it but with specific alternatives in mind.

What was issued on April 19th was a draft planning guidance which suggested a possible September date. On April 29th, Undersecretary Aldridge came to me with a very specific proposal, which suggested moving the Crusader money into a combination of the programs that the secretary has mentioned in his testimony against the background of several months of studies and analysis of this issue, it became -- it was very compelling that this was the right thing to do. We were then in the position of putting into the Defense Planning Guidance an alternative not to study it for six months but to bring it to a conclusion.

Secretary Aldridge and I met with Army Secretary (Thomas) White on the afternoon of April 30th. We told him this is what we were planning to do in the Defense Planning Guidance. He said he had serious reservations about that, would like to think about it overnight. He came back the next morning, said he would like to have 60 days to study it. We said that we would consider that request. Came back to him in the afternoon and said, at that point, 30 days. This was on the afternoon, May 1st.

In real time, as they say, indeed, while we were having our first meeting with Secretary White, by a process that I don't know, somehow our proposed alternative was already being lobbied against all over the Congress, and subsequently, we had the episode with the Army talking points.

We, basically, in an attempt to try to have an orderly process that would have given a little more time for consultation and deliberation, we ended up with something that was so deeply in the middle of your deliberations that we concluded we had to come to a more rapid conclusion so that you would have the information you needed. I believe we've been able to do that, in fact. The undersecretary for Acquisition, who is sitting here at my left, and the Army, have managed, working very intensively over the last 10 days, to come to agreement on what the alternative to Crusader should be. We actually have agreement on the numbers; some of the final details of language are being worked out with OMB, and I think we'll have an amendment up here, as we promised, coming Monday.

SEN. LEVIN: I'm kind of surprised by your truncated schedule there, because if sudden lobbying of us causes people just to change plans that way, to cancel a system which otherwise was being considered as one possibility, it seems to me that anything goes around here because we're being lobbied all the time on everything. So that would just be --

MR. WOLFOWITZ: It wasn't "being considered as one possibility," it was being recommended strongly as the right way to go. And --

SEN. LEVIN: But the decision had not been made; is that correct?

SEC. RUMSFELD: Well, I can tell you that I was -- I was advised of his recommendation after it was already in the Senate and the press and the contractors --

SEN. LEVIN: My question is, the decision was not made; is that correct?

MR. WOLFOWITZ: Not at that -- the decision wasn't made until the secretary talked to the president about it.

SEN. LEVIN: Thank you. Would you give us the Aldridge recommendation of April 29th for the record?

MR. ALDRIDGE: Yes, we will.

SEN. LEVIN: Senator Warner.

SEN. WARNER: Thank you, Mr. Chairman.

Mr. Secretary, your testimony today, which I must say is very thorough and provides a great deal of information to this committee, you covered everything. But your decision to make this cancellation is really a decision that you make pursuant to the powers under the Constitution of the United States by the commander in chief, the president, because you are bound and duty to carry out his instructions.

Now, the president came up to the Capitol Hill today, and this program was the subject of a discussion. We have a very firm rule not to publicly discuss meetings of this sort, so I will refrain.

But can you tell us to the extent you've consulted with the commander in chief, and the views within the propriety of your ability to share them with us, as to this cancellation?

SEC. RUMSFELD: Well, I can say this, that the Crusader is a subject that has been widely discussed in the press, it's been widely discussed in the Congress, it's been widely discussed inside the department, and I have been asked about it.

And I said to the deputy that I would like to have a briefing prepared that would -- that I could present where I could persuade myself and others that this weapons system was something that we ought to go forward with, that it was a good investment of $9 billion. Not that it was better than the Paladin. We know it's better than the Paladin. It's a good piece of equipment. But whether it made sense in the context of our joint warfighting capability. And the more that the deputy worked, and the more he worked with the folks in the department, it became clearer and clearer to them and to me that it was not possible to prepare a briefing that was persuasive. It was a very close call.

The president, when I went to see him and discuss this with him, is, I can say, solidly behind this decision. There is no ambiguity that he is -- his comments that I used here today from his various presentations on the subject of military reform are important to him. And he cares to see about this.

We know it's no fun for him to cancel a program people want. It's no fun for me. The last thing in the world I want to do is come up here and sit here and have to defend something when I know people aren't going to like it. If we'd gone ahead with it blithely, everyone would have been happy. And he feels the same way. But by golly, he's right. The people from five, 10 and 15 years from now who are in the White House and in the Congress and in the executive -- in the Department of Defense are going to be using the capabilities that we produce today, the decisions that are made today. They aren't going to affect our capabilities in the next two, three, four years at all. And so it's terribly important. And it's an obligation we've got. And he feels that way, and he's determined to see that this is effectuated.

SEN. WARNER: That's a clear response to the question.

I follow it up, then, for purposes of the next question, let's assume that the action as directed by the commander in chief is done. Can you guarantee this committee and the Congress that such funds as were programmed for Crusader will remain within the Department of the Army, and remain within the department for purposes directly related to those goals for which Crusader was designed and beginning to be tested?

SEC. RUMSFELD: What I can do is say that the proposal that Undersecretary Aldridge is prepared to discuss and which we've sent up in writing, the funds would stay in the Army. They would involve things that would advance the Army's capabilities by improving Paladin, by, we hope, moving forward the Future Combat System. It also would have a benefit by accelerating precision munitions that any service that happened to use that particular munition would benefit from that acceleration. I think that's the correct answer.

MR. ALDRIDGE: Could I make a --

Yes, Senator Warner. A good example of the alternative can be very simply summarized in that chart. That yellow portion of the chart is $9 billion. The idea is to take that $9 billion and to take the rest of the chart, starting in the '08 period, the MLRS and Guided MLRS, that will make that an accurate system with HIMARS (High Mobility Artillery Rocket System). And all the Paladin and 109s that are left will be all accurate weapons systems. So that whole chart become accuracy. And we will take the technology that's in that yellow area -- $9 billion -- and take the blue and move it forward.

SEN. WARNER: That's the -- I wonder if you're -- this morning we met together, the secretary, yourself and I -- could you ask Mike to step up there and actually point to the senators exactly how -- or yourself -- those funds are projected to move forward and remain within, say, the context of artillery purposes of the Army?

(Off-mike conferrals.) One of you step up --

SEC. RUMSFELD: Just to correct the record, I think, technically, that the yellow is not $11 billion. It's $11 billion from where it starts to '09. It's a lot more thereafter.

SEN. WARNER: But you pointed out this morning that that money can, in all probability -- shifted and the whole program's forward. Is that correct?

And the way I would describe it is, we are trying to introduce precision munitions across the artillery. And what is not listed here, by the way, is the lightweight 155 artillery, which is now carried by the Marines in the light forces and -- (off mike) -- to be fielded between now and 2005. This would all come in between '006 and '008. So this entire chart would be, if you will, dedicated to precision that quickly.

Right now, under the current budget that you are -- we have submitted to you, and without change, those precision weapons would come in sometime between 12 and 14, which would impact, by the way, mostly Crusader and then, later, Paladin.

There is right now work on the guided MLRS going on --

SEN. WARNER: My time is running along. Let me just follow up.

MR. WYNNE: (Off mike.)

SEN. WARNER: I think you've made the point. Can you then, Mr.

Secretary or either of your colleagues, assess the risk to a military operation, given that it appears that the gaps can be filled fairly quickly? Is there an added risk to our fighting forces as a consequence of the decision, or is that risk capable of being filled in a timely manner -- such risks as may exist?

SEC. RUMSFELD: Well, I think that's a question that is important, and it goes back to my comments, where I talk -- we have to balance risks about the immediate future against transformation down the road. There's no war-fighting capability that comes from an investment in something that will not be around for three, four or five years. We know that.

There is a war-fighting capability for it that comes around after three, four and five years, and if we don't seed the ground, there won't be any flowers growing.

But the answer is, it seems to me, that the Crusader, if it came in when it's shown there, in '07, started in, would be without question a better piece of artillery than the Paladin, even upgraded Paladin. Whether -- I don't think that's the right question, in this sense. It seems to me the question is, is the United States during that period going to be able, by the combination of upgrading Paladin, moving future combat system forward, improving your rocket systems and bringing the combined power of the United States with air, cruise missiles, all of those things to attack a target -- are we going to be able to deal with those problems in the future? And my answer is yes.

SEN. WARNER: Can you give us quickly termination costs as a consequence of the schedule that the secretary has now announced?

MR. ALDRIDGE: Yes, sir. Senator Warner, we have asked -- the Army has asked the contractor for a proposal on termination costs. That is a negotiable activity. We're working those details of those numbers right now. Until the negotiation is completed, we will not have the specifics of those numbers. We have not stopped work. We're still working with the contractor.

SEN. WARNER: You may not the specifics; can you give us the parameters -- the lows --

MR. ALDRIDGE: The parameters, roughly, are that we will use what is remaining of the FY '02 money for termination, and there may be some required in FY '03 as part of the negotiation. And it will also depend upon what degree of R&D we will retain from the Crusader that will go into the future combat system that the contractor will continue to pursue. And when all those details work out, we'll have the specifics. But the parameters are roughly that. '02 will be used for termination with some amount of money --

SEN. WARNER: What's left in '02?

MR. ALDRIDGE: What's left in '02 that has not been obligated, I believe, is in the hundred-million-dollar range.

MR. WOLFOWITZ: Senator Warner, I might just say, too, that a risk, if this recommendation is not accepted, is that our people will take longer before they have accurate Excalibur rounds and accurate GMLRS. And I think -- my own judgment is that's a much greater risk than the risk of not having Crusader. And it's a risk that applies across the whole force.

SEN. WARNER: Well, it looks like this is an advance that minimizes risk, yes.

SEN. LEVIN: Okay, we've got to move on to Senator Lieberman. We are now in a vote. Is there one vote or two, do we know?

STAFF: Just the -- (inaudible) -- amendment.

SEN. LEVIN: Just one amendment. Senator Lieberman.

SEN. JOSEPH LIEBERMAN (D-CT): Thank you, Mr. Chairman.

Thanks, Mr. Secretary.

I think I'm going to use my time mostly to make a statement, if you'll allow me to do so.

Members of both parties on this Armed Services Committee have for years been talking about the critical importance of military transformation; to take advantage of new technologies and to be better prepared to respond to the unconventional asymmetric threats that the United States will face to its security in the future. Transformation is, in fact, occurring within the military now and particularly within the Army. But the question is, is it occurring fast enough? And are we devoting sufficient resources to it and resources that are being spent in a cost-effective way?

There was reference made earlier to the post-Second World War period -- remember a book was written about the pre-Second World War period called "Why England Slept." I think many of us live in worry -- with the worry that one day, someone might be able to look back at this period of time and write a book called "Why America Slept." And the book will not be about why we didn't spend enough on our defense, because we are spending a lot. It will be why we didn't spend it wisely enough -- why we didn't make the tough decisions we had to make to transform.

And in that sense, I give you, Mr. Secretary, a lot of credit for making a tough decision here. Obviously, everyone has to judge it on the merits as he or she sees appropriate. But our willingness to make hard decisions, to transform rapidly and cost-effectively, so that America will be able to best meet the future threats to the security, is on the line in this decision that you put before us.

I know that some are concerned that this decision was somehow made in haste and without sufficient analysis. As far as I'm concerned, based on my experience on this committee, the analysis of the Crusader goes back at least five years and includes insights gained from actual combat operations over that period of time and before in Bosnia, Kosovo, and now Afghanistan.

But when I say five years, I speak particularly of the National Defense Panel, which in 1997 presented us with the first major study to conclude that transformation should be the highest priority for the Department of Defense. Panelists pointed out that the heart of America's continued military dominance and national security would be our ability to rapidly project and sustain combat power around the globe in face of rapidly growing capability to deny us this vital access.

I have specific recollection of a particular day before this committee -- I hope you will not resent that I bring this up -- where the current deputy secretary of State, Richard Armitage, specifically said to us that the National Defense Panel, or he personally in his -- as his consideration, reached a tough conclusion that the Crusader program should be terminated. That was 1997.

Those panelists and other analysts since then have concluded that conventional forces must be increasingly based on information technologies and precision strike, as you have described. Specifically, the NDP recommended that our land forces become more expeditionary, that they evolve to lighter, greater range and more lethal fire support systems. And those conclusions have been supported, to the best of my knowledge, by most all of the subsequent studies that have been made: the Hart-Rudman commission, the Project for a New American Century, as well as both QDRs and, in fact, many of the services' own war games.

Now, I understand that Crusader is a significant technical improvement over the current Paladin artillery system and that the Army considers it a critical component of the modernization of the current force. But our deliberations are and must be about the future longer term as well as the present and near term. Of course, I agree with General Shinseki that transforming the Army is the goal and that the Army's objective force, the future force, must be the highest priority.

Today the Army is being squeezed, no matter how much money we give it. It's attempting to modernize its current legacy force, to field an interim force, and to develop and field the objective force beginning in 2008. But we simply have not given the Army sufficient funds to do all three well, and we will not give the Army sufficient funds to do all three well.

I speak here as previously ranking Democratic member on the AirLand Subcommittee of this committee, serving under the chairmanship of Senator Santorum. Now we've switched roles; I'm chairman, he's ranking. But we have seen over this period of time, even as in this year the Army's overall budget has increased significantly, by $9.9 billion, and procurement funds increased by 13 percent, that even with that increase, the Army has found it necessary to cancel another 18 programs, cancellation which has been sustained, incidentally, by our subcommittee and now the full committee, including termination of certain programs that the committee restored last year at the Army's urging. General Shinseki, notwithstanding the additional $9.9 billion that you have requested and we have given him over last year's level, has nonetheless submitted a list of unfunded requirements totaling an additional $9.5 billion.

That can't go on. We're not going to find the resources in that circumstance to fully fund what we're all targeting toward, and that's the Army's objective force. We've got to find some resources to fund that transformation. That's our urgent priority.

And we're not going to answer that challenge with business as usual, or in somehow assuming that we're somewhere going to find the money later on.

And that's why, among other reasons, I've reluctantly reached the conclusion that your decision to terminate the Crusader program is the best one for our national security. In doing so, I must say I'm convinced that the American military today has an order of magnitude advantage, including the ability to employ massive fires, over any adversary or combination of adversaries that we can imagine now or into the near future. The U.S. Army, particularly, has a huge advantage in its ability to deliver fires on the battlefield now with the systems it has now, this despite the fact that there are other artillery systems in the world, as has been said, that have either a greater range than the Paladin or a higher rate of fire.

Now, why do I still say we have an advantage? Because we have an unmatched, and I am confident, unmatchable integrated, automated, joint system to acquire, target and attack targets with resources from the air, the land and, of course, the sea. And I think the argument is compelling that shifting to precision munitions will bring the same dramatic improvement in the Army in direct-fire capability that such a shift has brought to our air forces. If we need an improvement to today's howitzer, we should take the less costly option of improving the Paladin and investing in accelerating precision munitions and the Future Combat System Indirect Fire System.

So in sum, committing the $9 billion to Crusader, especially in light of the Army's resource shortfall, which I've described, will guarantee that the Future Combat System Indirect Fire System that is critical to the Objective Force, the future force the Army says it needs, will recede further and further away into the future, and the development of precision munitions and their acquisition in needed numbers by the Army will be similarly delayed to the detriment of the Army's effectiveness and our national security. The Army will be less prepared to deploy and employ land power in the increasingly joint precision regime, and its ability to meet and defeat the increasingly unconventional threats to our security will be diminished.

That is why, difficult as the decision is for you and us, I intend to support your recommendation to terminate the Crusader system.

I thank the chair.

SEC. RUMSFELD: Thank you very much, Senator.

SEN. (Robert) BYRD (D-WV): Mr. Secretary, were you about to say something?

SEC. RUMSFELD: No, sir.

SEN. BYRD: Senator Smith.

SEN. BOB SMITH (R-NH): Thank you very much, Mr. Chairman.

Mr. Secretary, as you know, there is a vote on. I just wanted to get a couple of quick questions to you, and hopefully you could just respond to them quickly so I can run and vote. But if I need further detail, I may ask for it.

First of all, obviously, you made a very effective and thoughtful presentation. My concern is the 24-7 capability of the Crusader on the battlefield versus the other precision weapons and the platforms, for the most part, requiring aircraft, where weather may have an impact, specifically, the Joint Direct Attack Munitions, the GPS systems, those kinds of -- the optical systems.

Can you assure us that we have 24/7 coverage with all that precision material in the short term? By "short term" I mean the time that this system would be in place, the Crusader would be in place.

There are circumstances when there may be gaps, and there, I think, always will be some. It requires, for example, GPS is -- works. And it -- the weather doesn't bother it.

SEN. R. SMITH: Well, if you have your forces under attack somewhere --

SEC. RUMSFELD: Right.

SEN. R. SMITH: -- on the ground, and the weather's bad, and the cloud cover's bad, and you can't get your aircraft -- you can't get your platforms up there, then, you know, you're in a situation that may be beyond your control; something's going to happen.

SEC. RUMSFELD: But if one thinks of all of the capabilities that exist, there is the artillery, there are mortars, there are rockets, there are cruise missiles, there are attack helicopters, there are bombers --

SEN. R. SMITH: Bombers, the attack --

SEN. R. SMITH: -- there are AC-130s, there's Army-Navy-Air Force fighter support, there's a variety of things that can be brought to bear. And we have found that almost always you can get one or more of them functioning effectively apart from weather and apart from circumstance. It is --

SEN. R. SMITH: I would agree with you perhaps on the bombers, the high -- the high altitude bombers. I'm not sure I agree with you on the attack helicopters and the --

SEC. RUMSFELD: Not all of them, but some of them are able to function in almost any circumstance.

MR. WOLFOWITZ: Senator Smith, one reason in this request that we are so committed to modernizing Army indirect fires is the issue that you raise about 24/7. But I think having precision 24/7 is the most important thing, and that's what we will get with this program by accelerating the Excalibur and accelerating the guided rocket system.

MR. ALDRIDGE: We'll get it about two years earlier.

SEN. R. SMITH: A 10-second answer, and I'd yield the balance of my time to Senator Inhofe, who's already voted, is there any reason -- quick answer here -- why the AOA in February, as Senator Inhofe will probably talk about, why that cannot occur before this final decision is made? What will we lose?

MR. ALDRIDGE: We're spending money, obviously, on the program as we proceed. And the analysis that we have today says this is a better alternative. And so the decision that the secretary has made is a direction for us to go use the funding, that we can use the funding earlier to start these new things rather than continuing to spend on something we think is dead-ended.

SEN. R. SMITH: Thank you. I yield the balance of my time to Senator Inhofe.

First I wanted to say, Mr. Secretary, I recognize that you have had plenty to do since September 11th and the like. And therefore to conduct this review in the midst of all of your other responsibilities, I certainly want to acknowledge the enormous burden that you and your colleagues have borne on behalf of our country and to pay tribute to you for doing so, and then for your success in doing so.

SEC. RUMSFELD: Thank you, sir.

SEN. DAYTON: I like others here am trying to reconcile the change in the decision made, and I've taken your point, sir, about the change in strategy, or evolution of strategy given the uncertainty of the kind of enemy we'll face in the future, the warfare that that enemy will be conducting. Would you -- and I'm wondering if the lessons that are being drawn from the successes in Afghanistan against the Taliban in a terrain such as Afghanistan are ones that we would want to apply uniformly to, as you yourself said, the uncertainty of who our future enemies might be, and taking the president's observations in the State of the Union of the possibilities of, you know, countries that are ones that would seem to have very different terrain as well as much more sizable military capabilities. Do you see, then, this strategy that you're developing as one that's going to have that same applicability? And the converse of that is that would the Crusader have a role to play more importantly in other settings?

SEC. RUMSFELD: Well, there's no question but that lessons from Afghanistan ought not to be applied across the globe. They just -- you're exactly right, they can't be. There are some lessons, however, that can be useful in a number of other instances.

When the question's asked, "What's changed?" it seems to me it's useful to think about it. We had the Quadrennial Defense Review, with the new strategy and the new force-sizing construct. We have had the experience in Afghanistan. We have seen how a much higher percentage, from 7 percent in 10 years up to 66 percent, of our munitions used were precision. And those are choices being made by people because they understand the importance of killing a target, and the precision munitions do it so much better.

The advantages in lower -- smaller logistic chains, the collateral damage problem, it seems to me, is an important one to keep in mind. I think that we're going to find that we're going to be forced to fight in places where asymmetrical efforts will be made by enemies to put themselves in close proximity. We look, for example, today at terrorist states, and they are literally putting their weapons of mass destruction capability right next to schools and hospitals and mosques, purposely. And they even have some buildings that are erected for that purpose right next to high-collateral areas.

The other thing is, the bow wave has also changed. As you go out two more years and get the '04 to '09 and look what's ahead of us, there is no question but we have no choice but to make decisions now. And it seems to me that it is that range of things, part of which is the lessons from Afghanistan, that are what has changed.

SEN. DAYTON: Regarding the issue of precision -- and I certainly would concur with your giving that a high priority -- the testimony from General (John) Keane before this committee on March 18th of this year -- and he was, of course, in a different context -- very supportive of the Crusader and said that it had the advantage over -- and could have been used in al Qaeda to -- I'm sorry -- could have been used in Afghanistan to, as he said here, pound al Qaeda in the mountain areas, that they could have -- unlike some air-delivered munitions, poor weather would not have stopped Crusader's precision fire, he said. Then to give, actually, Senator Inhofe, who was doing the inquiry, a sense of the Crusader's range and precision, General Keane said, "We could put it on the Beltway out there and hit home plate in Camden Yards." That sounds pretty precise to me. And the other corollary to that would be, if the intent is to equip other -- shells for the Paladin or other such artillery vehicles with some advanced guidance system, wouldn't that equally apply to the munitions for the Crusader?

SEC. RUMSFELD: Absolutely. There's no question. You can put precision munitions in the Crusader. And if it existed, you would certainly want to do it. And you can put it in the Paladin. And you can put it in any number of tubes that fit. General Keane is, as is General Shinseki, they're outstanding Army officers. There's just no question about it. And they say what they believe, and they tell the truth. And they're honorable people and talented people.

The issue is not in my view whether Crusader is a fine artillery piece. (Laughs.) The issue is, is the United States, during the period we see up on that chart, are we better off upgrading the Paladin, eliminating Crusader, bringing forward the future combat system and improving the munitions of all of those capabilities, including the rocket systems? And the answer is, I think we are better off.

I think Senator Inhofe had an important point -- I think it was you, Senator -- about the cost. There's not question but that the cost of precision munition is higher. But there -- Pete, you may want to comment on a solution we think we have there.

MR. ALDRIDGE: We have an idea for taking all of the artillery pieces and using an upgrade NATO fuse and putting a slightly improved guidance system on the NATO fuse so that we can bring all artillery pieces, even the ones that are so-called "dumb," into the 10-to-20- meter range accuracy. And that's going to be extremely effective and not anywhere close to the expense that we were going to get on the Excalibur. We think we can get Excalibur down to -- in the mass production, to in the range of $30,000 a round. But it tells you, Senator Dayton, that when we get pretty up into the Net Fires area and DARPA, we'll be able to put the weapon on the pitcher's mound in Camden Yards.

SEN. BYRD: You don't have to do that.

SEN. DAYTON: When Secretary of the Army White testified before the House Committee on March of this year, he was -- he referenced specifically this issue of the capability of the Paladin. He said if there was a serious match-up problem with the Soviets in terms of artillery, there would also be a challenge with any of the three countries that the president talked about recently -- Iran, Iraq, North Korea. The secretary went on to say, "We have band-aided the existing system, the last of which is called Paladin, about as far as we can stretch that rubber band," the secretary said. He had two weeks previously been to the national training center and watched a Paladin battery unable to keep up with the M-1 tanks and Bradleys that were in the attack. He said this will only get worse as we field more highly mobile systems both in our interim brigades and in or future combat systems.

Again, I guess I would ask, are you confident that the Paladin is going to be able to bridge this gap until these other new systems come on-line?

MR. ALDRIDGE: The Paladin -- the plan for Paladin is to have it in the inventory up until the year -- I've seen several numbers -- 2028. So we're going to have to keep the Paladin around and make it effective for a long period of time.

The current Paladin average age is about 6 1/2 years old. It's been in production since after --

SEN. DAYTON: Could you address the specific operational shortcomings that the secretary of the Army referenced?

MR. ALDRIDGE: Yes. The Paladin is in fact slow than the Crusader.

And we've admitted that Crusader would be a better artillery piece than the Paladin program. But we want to make the Paladin have the accuracy, and when we put the Excalibur round on the Paladin, it gets out to 40 kilometers, and it makes up quite a bit of the range difference that we have seen. And if you talk about the actual operations of the Army, what is the actual speed at which artillery and tanks fight on the battlefield, I think the speed factor is significantly lower than running at max speed all the time.

SEN. DAYTON: Thank you, Mr. Secretary.

My time has expired. I just would say, if we're going to carry the Paladin to the year 2028, then having stretched the rubber band as far as it'll go should give us pause.

SEC. RUMSFELD: Well, if I might say, the Paladin is scheduled to go out even with the Crusader coming in.

SEN. DAYTON: I understand that.

SEC. RUMSFELD: Yeah. And I think it's not correct to say it's stretching the rubber band; I mean, I think the fact of the matter is the Paladin is a weapon system that was entered after the Gulf War. It isn't something like the B-52s, that dates back 40 or 50 years. It's a -- portions of it preceded it, and, as most things, they evolve over time. But it is a weapon system that -- the current Paladins, as I think you said, are 5.6 years old, or something.

SEN. DAYTON: I didn't make the analogy to stretching the rubber band. The secretary of the Army did.

SEC. RUMSFELD: Right. I understand.

SEN. DAYTON: Okay.

SEN. DAYTON: My time has expired.

SEN. LEVIN: Thank you very much.

Senator Inhofe.

SEN. INHOFE: Thank you, Mr. Chairman.

Well, yeah, while we're on that subject, let's pursue that a little bit. I -- first of all, I'm not sure who all really understands this chart up here. I got the presentation in my office, and I do appreciate it.

Let me say, first of all, I think -- I've said many times I think we have the best national-security team in the history of this country. I hold you guys in very high regard. But I think the problem here is, you are busy prosecuting a war. You're busy looking at a national missile defense -- things that we're gong to have to have. And I think this just slipped by and did not get the proper attention. This is my concern that we have. And I don't want anything I say to reflect in any way in a negative way, because I -- you know what I said in the past about you.

But when we're talking about this Paladin, that's essentially the howitzer 109. That was 1963. Now there have been some upgrades. There are upgrades every year. There have been upgrades to the B-2. There have been upgrades to the C-17. We constantly upgrade. But this is a basic system that did start in 1963. The basic changes between that and when we started calling that system a Paladin in 1993 were the GPS and the new fire-control system, allowing the guns to spread out and compute their own firing area. But still, it's manual.

It's kind of like looking at the Civil War movies, you know, where they put the shell in and they fire it by hand and they pull it out and they clean out the bore. This is not a modern system, and it is a system that is, I contend, 40 years old. And I'd be glad to go into -- is the same as it was 1963, in terms of the maximum range, the maximum rate of fire, the same rate of fire, cross-country speed, cruise size -- all of that is the same as it was back in 1963.

Now -- and I hope -- I wish we had more members here to listen to this, because I think we've gotten some information this is inadvertently wrong. One was, when you talked about it takes 60 to 64 C-17s to move 18 Crusaders. Mr. Secretary, I don't believe that. I know that you do, and I think that maybe there's a mispronunciation here, because in the Department of Defense Weapon Systems 2002, it specifically says, "in addition to strategic deployability -- two howitzers transportable in the C-17."

Now, they're talking about two howitzers that are transportable in the C-17. And I think if you have to have the resupply vehicle in there with them, it'd only be one. And I have heard this over and over and over again. Ammunition, that's a different thing. You always have to worry about getting ammunition to the area where it's going to be used.

But essentially, we're talking about one with the resupply vehicle being able to be transferred with a C-17, and two, if you don't use the resupply vehicle. Now that's -- and essentially, then, if you have 18, it would take 18 of our C-17s. And our C-17s have proven to be the greatest lift vehicle that we've ever had.

Now, you can sure respond to that, if you want to, not taking too much time, because we are limited on our time.

SEC. RUMSFELD: The -- I'll just make a brief comment. It is true that what you said is technically possible. That does not include the armor. The armor has to be taken off of the Crusader, carried on a separate aircraft. It does not include the fuel. It does not include the ammunition. It does not include the vehicle that is needed to be in close proximity to the weapon.

We asked the Army and the Army came back with that answer; the answer is 60 to 64 C-17s --

SEN. INHOFE: Well, I -- (chuckles) -- Mr. Secretary, the Army didn't read their own manual, if that's what they came back with.

Now, I want to get to something else that is very significant, Secretary Aldridge, and that is when your assessment -- you heard my opening statement, didn't you?

MR. ALDRIDGE: I'm sorry, I didn't hear.

SEN. INHOFE: Did you hear my opening statement?

MR. ALDRIDGE: Yes, I did.

SEN. INHOFE: In my opening statement, I talked about our attempting to find out what costs would be associated with cancelling a program at this time.

MR. ALDRIDGE: Yes.

SEN. INHOFE: And I said if you only take one of those four costs that would be there -- you know, the other costs would have to do with upgrading other vehicles -- that just that the costs of termination, according to what we got in a range from the PMs -- and we took the effort to find out, then we called and talked to the contractor -- it is going to be in the range that I outlined, between $300 million and $520 million.

Now, I know it's a negotiated thing. They'll come up with a figure, you'll come up with a figure, if this should happen, and you negotiate.

But I'm saying it's very conceivable it could be in that range. And we got to get out of this mindset that we have $475 million to reprogram into other systems. It flat isn't true.

MR. ALDRIDGE: The numbers we're getting from the Army at this point -- and I would highly suspect the numbers we're going to get from the contractors because they're going to be on the high side, guaranteed, because they want to get as much money from the termination as they can. But it is a negotiated term.

The numbers we're getting from the Army now give us better confidence that we're able to do the termination to complete the work in FY '02 without any increase in cost. And then --

MR. ALDRIDGE: Senator, one other point, is that we want to use a lot of the technology that has been developed for Crusader in the Future Combat System, and particularly the gun, some of the armor, some of the technologies --

SEN. INHOFE: To me, that is the best argument to wait until the AOA, when we find out what we do need in this system, and at that time, if it's necessary to -- if you have the analysis, have the analysis --

MR. ALDRIDGE: Well, sir, if we wait --

SEN. INHOFE: -- cancel the program --

MR. ALDRIDGE: If we wait, we will not have the ability to use the funds that will be available to us to go do the things that are identified here, to accelerate them.

SEN. INHOFE: Okay, we're not getting anywhere here, because I'm contending there may not be any funds at all.

And Mr. Chairman, I think if you're making a mental list of those things that we really need to determine, that should be high on that list, because we don't know. And if you don't know, I don't know, and they don't know.

Now --

SEC. RUMSFELD: I don't think you can know termination costs until you negotiate the termination costs with the contractor. Isn't that right?

SEN. INHOFE: I understand. Thank you very much, sir.

SEC. RUMSFELD: Pardon me?

SEN. INHOFE: Now a criticism that I have of the way this was put together was your -- and I know you guys didn't put this together -- in terms of the handouts that were there at the Pentagon briefing, the Pentagon briefing when they announced that this program would be cancelled. But in this Pentagon briefing, you quoted all kinds of publications. I have to admit -- and you guys know it also -- that there are a lot of newspapers out there, a lot of people in the media, they don't think we need a defense to start with. But one of the highlights that you used was from the San Francisco Examiner, when they said if this is a white elephant, we need to -- you know, it's -- it was a very damaging type of thing.

Now the San Francisco Examiner is -- has also said in recent publications, talking about a national missile defense system -- it's important that you hear this -- "despite the enormous sums of money spent, creating innovative, high-tech weaponry is difficult. Pinpointing warheads going 15,000 miles per hour has been likened to trying to find a fly ball looking through a soda straw. Never mind the problem of decoys around missiles. During tests, ground-based interceptors missed targets two out of three times." And they went on to come to the conclusion that it's a fantasy. You know, they use "Star Wars" and all these antiquated things to try to denigrate our wanting to defend ourselves against an incoming missile. That's what they think about national missile defense system.

F-22, they say already, in the same article, "drowning in $9 billion worth of cost overruns, the plane that holds the dubious distinction of being the costliest fighter aircraft ever built does not, in the view of most experts, do anything very different from Joint Strike Fighter, also in development." Now I would only say: Why would we use a source like that to try to denigrate -- which they did in this -- in your handout, during the thing -- for the Crusader?

SEC. RUMSFELD: I have no idea what you're referring to.

SEN. INHOFE: Well, this is a Department of Defense publication for the Pentagon briefing of May 13th, 2002.

SEC. RUMSFELD: And what's it do? Quote a bunch of newspaper articles?

SEN. INHOFE: Yeah. Yeah.

SEC. RUMSFELD: They put out newspaper articles every day in --

SEN. INHOFE: No, this is -- I'm sorry. Not you, but the Department of Defense put this out for your briefing. I'm just saying -- apparently we agree --

SEC. RUMSFELD: For my briefing? For my briefing?

SEN. INHOFE: For the May 13th briefing.

SEN. WARNER: And you cancelled --

SEC. RUMSFELD: You mean for the Pentagon briefing?

SEN. INHOFE: Yes.

SEC. RUMSFELD: Okay. I just haven't seen it. I'm sorry.

SEN. INHOFE: Okay. Well -- okay.

All right. The -- Senator Warner brought up something of -- a concern of mine, and that is, the president has developed some pretty firm ideas, and I just wonder if the president has really had the briefings necessary. He's had his mind on a lot of different things.

Secretary Rumsfeld, I've taken the time to call you, to call Secretary Wolfowitz. You know that. I've called everyone I can think of, everyone I've met in the military, to get advice. I've called the secretaries -- all the secretaries. I called the secretary of the Army to ask him, on several occasions, if he had had a chance to brief the president about the Crusader. And the last time I called, he said he had not. He had wanted to do it, had not been able to do it. Do you know whether or not Secretary White has had a chance to sit down with the president of the United States and give him a briefing?

SEC. RUMSFELD: Senator Inhofe, Secretary White sees the president on a variety of occasions. I do not believe he's briefed him personally on it. And I know that General Shinseki sees the president on a variety of occasions, and I do not know if he's briefed him on it.

I think to put it in perspective, the Crusader program is point-5 percent -- less than 1 percent, one-half of 1 percent -- of the Defense Department budget. It's a lot of money. Don't get me wrong -- $470 million, $(4)74 million. But it is one-half of 1 percent. It is about a percent and a half of the Army budget. And it's about 2- 1/2 percent, I think, of their investment budget. And --

SEN. INHOFE: Exactly. I agree. I agree it is. And it is -- and, however, if we can increase to use one-half of 1 percent of that budget to give us superiority in an artillery system --

SEC. RUMSFELD: That's important.

SEN. INHOFE: -- I as one member of the Armed Services Committee think that's a very good investment.

The problem we have is -- and I don't think anyone's going to argue with the cost of the rounds. Yes, the Excalibur, if we got to the ultimate number, the lowest it's been -- and I've got the evidence of this -- it could get down to $36,000 a round. But we're talking about an artillery shell, it's $200 a round. And these -- and if we're concerned about the superiority of our system as opposed to the existing Paladin, it is outgunned in range and in rapid fire by equipment that is manufactured in four other countries and that's readily available on the market, this concerns me a great deal.

SEC. RUMSFELD: Senator, I don't disagree. I think that the way to think of -- you're quite right on the cost of the two rounds. The problem is, you've got to use a bucket of the dumb rounds to achieve what a single round can do if it's a smart round. The same thing's true from bombs. We found that. And the difference is enormous. It's not just enormous in the numbers of things that have to be used, it's in the numbers of things you can use them for, because if you're using dumb bombs, you can't use them in high collateral areas, you can't use dumb artillery shells in high collateral areas, because they're going to have a spread that's very notably different from a precision weapon. So I think it's -- comparing the two numerically is correct, but I think that we have to add that dimension to it.

SEN. INHOFE: Numerically, as we start off, you could actually fire a thousand dumb rounds for the cost of one Excalibur -- at the current time.

SEC. RUMSFELD: The problem is you couldn't senator, because you couldn't use dumb rounds in a lot of places where we've got to fight. You need precision rounds.

SEN. INHOFE: A question I had had, and it's already been answered once by Secretary Wolfowitz in previous hearings, was are you confident enough that we would not have ground wars in places like Iraq, China, Iran, and other places where we would need that very precise thing, according to the testimony of the uniformed officials? And I don't think you're very comfortable with that. In fact, Secretary Wolfowitz, I believe you said "I wouldn't want to bet the farm that we wouldn't need that type of artillery capability in the future," and you complimented it, saying it is the best one out there. I mean, I'm saying that I believe that a case can be made and has been made by the uniforms that we need to have that capability.

MR. WOLFOWITZ: Senator, we very much think we need to have that indirect fire capability. That's why when we are looking at a simple comparison of Paladin versus Crusader we came to the judgment in the '03 budget that it was the right choice. But as we did this work in looking forward to '04 and began to look at the other ways we could spend that money on Army indirect fire systems, we concluded that precision and mobility and deployability were much more important characteristics and accelerating those was critical.

SEN. INHOFE: (Inaudible) -- today. Let me ask you a real quick question that -- we're all concerned with JROC and the role that it plays in these things -- the Joint Requirement Oversight Council. Was JROC consulted and a part of the decision to terminate the Crusader?

SEC. RUMSFELD: No. The JROC basically is functioning as a -- with the vice chiefs as the members and the vice chairman as the chairman, to look at requirements and look for interoperability. And the JROC looked at Crusader eight years ago, and it looked for it with respect to rate of fire and mobility but not precision.

SEN. INHOFE: Well, how about the Secretary's Executive Council? I was very much impressed when you first took this position and you talked about the role that would play. Did it have a deliberation over the termination of the Crusader? That's made up of the secretaries of all the -- not for your benefit, but for our benefit -- along with Secretary -- those who are at the table here.

SEC. RUMSFELD: Pete, do you want to tell the entities that analyzed it? I don't believe the SEC did.

SEN. INHOFE: No, I just want to know on the -- on that SEC.

MR. ALDRIDGE: We actually did some hearings with the Army --

SEN. INHOFE: The SEC?

MR. ALDRIDGE: The SEC. They were not involved in the final determination --

SEN. INHOFE: They were not involved in the decision.

MR. ALDRIDGE: But they were involved with it before that analysis.

SEN. LEVIN: Thank you.

SEN. INHOFE: Thank you, Mr. Chairman, for your tolerance.

SEN. LEVIN: Senator Cleland.

SEN. MAX CLELAND (D-GA): Secretary, my first instinct is that I am embarrassed for you and the department for having to come here and fight out internally over an artillery piece. I would much rather you come here and we match wits with your wonderful mind and your great staff about, say, the strategic future of the Army, the strategic future of our forces, the number of forces it will take to win what Sam Nunn calls the war on catastrophic terrorism. I'd much rather argue that out, about how much time it's going to be before some terrorist organization lays its hands on a weapon of mass destruction. I would rather we engage in those kind of things.

However, there are two disturbing things about this argument that bother me. One is the way in which it was handled. In many ways, Senator Roberts and I have seen this movie before. The Crusader decision is similar to the B-1 decision last year. Last summer, Senator Roberts and I were engaged in a fight with DOD and the Air Force on their decision to consolidate the B-1 bomber force. Neither DOD nor the Air Force had analysis to support the decision; quite the opposite. The data that Senator Roberts and I had was contrary to the Air Force's decision.

I also point out that the Crusader decision mirrors the B-1 decision in that we, the Congress, were notified by the media reports. The process that DOD has used regarding the Crusader and the B-1 bomber is disturbing. I'm troubled that we're here today discussing the fate of this weapon system. There are many other issues that warrant attention, as I've said. However, we didn't create this process and this procedure, we're only responding to it. Rather than becoming a partner in the decision, we in the Congress are relegated to reacting rather than being consulted. That's the process.

The second thing that really bothers me, though, is the substance of the decision. On the one hand, we have a former secretary of Defense, Frank Carlucci, a former chairman of the Joint Chiefs of Staff, General John Shalikashvili, and a former chief of staff of the Army, as well as the chief of staff of the Army now, all lined up supporting this system.

And, quite frankly, General Sullivan's argument in the Washington Post today makes some sense to me, as an Army guy who served on the ground. General Sullivan points out that the Crusader covers an area 77 percent greater than the current systems and has a 3-1 advantage in rate of fire. You keep saying that that's not precision. Well, I've been on the ground, seeing a 155-millimeter howitzer -- not the Paladin and certainly not the Crusader, and I've certainly seen a B-52 bomb strike. The B-52 bomb strike is not precision, either. But we need it.

I would say to you that it does bother me that you're asking us to in effect ratify the decision you've already made that eliminates this program of the Crusader where we've already pumped $2 billion into it and exchange it for -- what? You haven't even analyzed the alternatives. You don't have an alternative! That chart is not an alternative. You haven't analyzed the alternatives yet. What are the potential alternatives? As far as I can tell, it's something called the Excalibur, which I gather is a round of some sort -- some family of guided munitions still in research and development -- some guided multiple-launch rocket system. "Development is underway." That's all I can find out about it. DARPA -- the Defense Advanced Research Project -- something called NetFires in the research and development stage, a prototype as yet to be tested.

MR. : (Quietly.) Rush Limbaugh.

SEN. CLELAND: In my part of the world, they call that a pig in a poke. And quite frankly, based on what I gather, the requirements in the war on terrorism, where we're already in harm's way in Afghanistan this very moment, this weapon system could be highly utilized and expand the range of the 101st Airborne and the Mountain Division -- 10th Mountain Division and the range of artillery support for our Special Forces and Special Operations. It could be used there now. It could be put on a C-17 and flown there in 24 hours. That's real. I understand that. I get that. I don't get that chart. I don't get no analysis of alternatives.

Where's the so-called cost-effectiveness in all this? I mean, supposedly, over $400 million is going to be, quote, "saved" for, quote, "higher-technology purposes." Where's it going to go? What other weapon system is this going to be part of? That's kind of mush, an iffy thing, as far as I'm concerned.

So I can't buy a pig in a poke -- not with the troops in the field out there that need increased artillery support. And I'm going to support Senator Inhofe's amendment, and gladly so, because, number one, I think the Army needs more troops, which I -- this is a subject for another hearing and another amendment, which I will be proposing. But I think the Army also needs greater firepower and lethality and greater range of coverage or artillery support of these troops on the ground, and you can see it in Exhibit A in Afghanistan today.

My point is, Mr. Secretary, why would -- after pouring 2 billion down on this artillery piece, why did your staff, your top people, not buy the argument of a former secretary of Defense, a former chairman of the Joint Chiefs of Staff and two of the most recent Army chiefs of staff? Seems to me that's pretty compelling testimony. Why didn't you buy that?

SEC. RUMSFELD: Well, Senator, let me make a couple of comments and then ask Deputy Secretary Wolfowitz to make a comment.

First, I'd like to clarify something with Mr. Inhofe which you raised about -- you say just put it in a C-17 and take it over. The answer I gave you, to be very precise, is 60 to 64 C-17 sorties to lift 18 Crusaders, 18 supply vehicles, the battalion, what you need to function and operate, is what it takes to move from the United States, somewhere in Texas, to the Middle East, for example. If you were going to Korea, it would take 50 to 64, depending on how it was done. And that includes the 18 Crusaders, the 18 supply vehicles -- this is 18 tubes, is what you're getting -- the ammo, the fuel, the water, the food, the command and control, the crew, and what the unit needs to go and function; in other words, how they go and fight. That just I did not want to leave you with the inaccurate impression there.

Senator, you said, well, how can you not take the advice of a former secretary of Defense and a former chief of staff. It comes -- these are fine people. I don't deny that. They're friends of mine. They're the people who make the system, a lot of them. And that's fine. They ought to be for it. And I've said it's a good system. There's nothing wrong with it. The question isn't is the Crusader a good system; the question is, how can the taxpayers best put their money to see that we have the fighting force we're going to need for the future?

One other thing I would say. I don't know if you were here when I mentioned it, but when the Army came to me 25 years ago and said they wanted to have an M-1 tank with a diesel engine, the Army was unanimous. And we decided to go with a turbine engine. And the Army thinks that's a good idea today. The very people who opposed it think it's a good idea today. The cruise missiles. The military didn't want cruise missiles; they wanted to trade them off back 25 years ago. And we insisted, and the cruise missile's been a very fine weapon. The Air Force was not enamored of GPS, and over time, the Air Force recognizes how critically important GPS is. The Air Force wasn't enamored of unmanned aerial vehicles. In fact -- General Jumper was as an individual, it turns out. But JDAMS, JDAMS were not the top on the list of the military.

These situations have to be looked at that you should expect the services to come up with what they honestly believe is best. And there's no question that the Crusader is a better weapon than the Paladin, and we all acknowledge that.

The department as a whole has to look at what the CINC, the joint warfighter, has to deal with. And he's not interested in what the Army thinks is the best piece of artillery. He's not interested in what the Navy thinks if the best cruise missile. He's interested in -- or what they think is the best airplane. He's interested in what he can bring to bear on a target in a given situation. And it's that joint combined capabilities that make the difference.

So, while I have a lot of respect for those people, it does not bother me that a department could come -- and there was plenty of analysis. I mean, the PA&E was involved in it and others were, the Joint Staff was, in different pieces of this. Paul, you might mention some of these are actually -- there's more development in some of them than there is in the Crusader.

MR. WOLFOWITZ: Yes. If I might, Senator, just on this issue of whether it's a pig in a poke, the Guided Multiple Launch Rocket System is a system that's already far ahead of Crusader. The High Mobility Artillery Rocket System is another one that's far ahead. The Excalibur round -- and we can give you detailed information on every one of these programs -- the Excalibur round which was planned for an '08 IOC, which would be the same as Crusader, we actually believe with this new funding that we're requesting could be accelerated to as early as '04, '05.

You're absolutely right, I believe, about the need for indirect fires. We already demonstrated 10 years ago that our then-existing artillery and guided rocket systems were devastating to the Iraqi forces. The systems that we're talking about here would be even more so. And it was a judgment, in fact, that those are more urgently needed than the high rate of fire and range that would be delivered by Crusader.

SEN. CLELAND: Thank you.

SEN. LEVIN: Senator Santorum.

SEN. RICK SANTORUM (R-PA): Thank you, Mr. Chairman. Mr. Chairman, I'd just like at the beginning to in part associate myself with the remarks of Senator Lieberman. As the chairman of our subcommittee on AirLand forces, we have been very, very concerned about this bow wave that's out there, we've very concerned about the Army's ability to make very tough decisions to modernize and at the same time field an interim force, which this subcommittee has been the only subcommittee questioning the wisdom of doing so and the financial strain it puts on modernization as well as maintaining the legacy force. And I think we're beginning to see some of the fruit being borne by some of the decisions on that issue. And that is, the cancellation of other programs. And this is one; there are 18 other programs, as you know, that were cancelled this year in the budget.

My concern, I understand your analysis and why you're doing it from the standpoint of whether this is truly a transformational system and it fits in with Army transformation. My concern is one of, you know, of finances principally. But I obviously, you know, have to consider your comments about whether this is, in fact, an appropriate system for transformation. What I asked Secretary Wolfowitz when he called me last week and we talked about this was, were there any other proposals given to you, options given as far as downsizing of the amount of Crusaders that you're going to buy? And the reason I ask that is, is because all the literature suggests that Crusader has three times the firing rate of the existing Paladins. So why are we doing a one-for-one replacement of 480 Paladins for 480 Crusaders if we have three times the fire rate? And when you're also talking about, as the Army seems to suggest, that they want to be lighter and more lethal, having the same number of battalions of Crusaders, which is a heavier system, than Paladins doesn't sound either lighter -- now, it sounds lethal, but it doesn't sound any lighter to me. So one of the things that I asked Secretary Wolfowitz, was there any options being laid on the table as to how we could take a system that fires at three time the rate and maybe, you know, reduce our buy by two-thirds and still have the same capability as the current Paladin gun system? And if we did that, obviously it's -- your $11 billion program isn't an $11 billion program any more, number one. Number two, because of the increased automation of Crusader -- it's a highly automated system, where the Paladin is not -- we would have a dramatic reduction in force structure associated with operating those artillery units. I asked my staff to put together a financial analysis of this would work out. And if we, in fact, reduce the number of active duty howitzer battalions from 20 to 7, we would -- and reduced the number of personnel necessary to support those battalions, we would have an annual cost savings of $403 million. Now, that's -- a bulk of that is -- there's two components of that. One is we're buying less Crusaders; second, we have a lot less people involved in operating these systems.

My question to you is, first, did the Army ever approach you when you said -- when you looked at terminating this program because of your concerns about cost and suggest that this might be a viable option?

MR. WOLFOWITZ: I would say to the contrary, senator. You may not have been here when Secretary Rumsfeld described the process which we went through early this year to produce a briefing that would be compelling to him about the decision to put Crusader in the budget. And one of the things we went through in some eight meetings that I had with the Army and multiple meetings that Secretary Aldridge's staff and PA&E had with Army staff was to look at a way of showing that you could actually get a significant force structure reduction out of Crusader.

We never got an option from the Army that showed that.

But the other point is that, as it became clearer and clearer to me that the alternative -- the real alternative was not to compare Crusader versus Paladin, but to look at what improved accuracy could get for you -- and improved accuracy can do -- have enormous effects, including in lethality, including in avoiding collateral damage, but also in reducing the huge requirement -- and it is huge -- to deliver artillery shells. If you can hit a target with 30 rounds instead of -- one round instead of 30 or one round instead of 100 or 150, it's going to have a big effect on that piece of your force structure. But what I found ultimately compelling was this argument for precision and for deployability.

SEN. SANTORUM: I guess, Mr. Secretary, I accept that argument. I accept that we have to be higher-tech, then we have to be lighter, and higher-tech means more lethality.

I also share the concerns of others, which is just having the raw firepower capability as part of our -- of an arrow in our quiver here is not something, as you said, you can dismiss out of hand.

My concern is -- is really not with you but with the Army, as it has been for quite some time, as a member of this committee -- that the Army seems to graft on. And we have a member here from Georgia who suggests that he's going to offer an amendment to increase end strength. I would just suggest the opposite. We need to talking to the Army in particular about not trying to hold on to people and to try to do what business is doing, what we're trying to do here, which is to substitute technology for people and use the cost savings to increase our lethality and our efficiency.

And what I've seen here is a case in point of the problem with the Army. And the Army has not come forward and said, "Yes, we're willing to give up people to have a mission that is more affordable and more lethal and higher-tech." And what you're telling me is that in your meetings with the Army, they never put that on the table. Is that correct?

MR. WOLFOWITZ: Essentially yes, sir.

MR. ALDRIDGE: Senator, can I just make a small point, a couple quick points? One is that we have about $2 billion left to spend just through the FY '07 for the Crusader R&D. If we kept even whatever the size of the number of Crusaders we bought, we'd still have a $2 billion bill in the R&D that could not be applied to these new capabilities.

And second, in terms of firepower, if you take -- talk about a command center, command and control post, which is a typical Army command post of 20 by 20 meters, it takes 147 dumb artillery rounds to kill it. It takes three Excaliburs to do so. That's firepower -- when you can kill that target with three rounds immediately.

SEC. RUMSFELD: And what the important part of that is -- it isn't just the fact that it only takes three rounds to kill something. The logistics part of it is just enormous. The cost of bringing along the extra hundreds of weapons that are not needed if you have a precision weapon is just enormous. It's enormous in terms of dollars. It's enormous in terms of time that you're capable of deploying. And it's enormous in terms of maintaining it and moving it.

SEN. SANTORUM: I --

SEC. RUMSFELD: You know that.

SEN. SANTORUM: No, I -- again, I accept --

SEC. RUMSFELD: Senator --

SEN. SANTORUM: I accept all those things. But I think what you're saying is, we need to go to precision weapons, and I accept that.

But I think what we're saying is here that there also is a place for this kind of firepower, a potential need for this kind of firepower. It's -- at least it's been testified over and over and over again that there is a need for this. And what you're saying is, yes, we accept that need, but we have a greater need for precision weapon.

And what I'm saying is that at least through the analysis that I've looked at here, that there's a potential to accomplish both. Now I understand the issue of the R&D and that funding gap, but it seems to me that the gap under this analysis is a lot closer, particularly if we can reduce personnel costs, because those are not just one- and two- and three-year costs, those are long-term costs and very expensive costs over the long term. That again, I don't fault you. I fault the Army for not coming forward with what I think would have been -- well, let's just put it this way: It made your job a little harder to make this decision that you just made.

MR. WOLFOWITZ: Senator, could I make two points? Number one, we have enormous capability to deliver massive firepower. We demonstrated that 10 years ago even with the systems of 10 years ago with our artillery and rocket systems. I think all the evidence from Desert Strom was that, no offense to the Air Force, that the Army artillery systems, rockets and howitzers, were much more devastating to Iraqi artillery than anything we could do from the air. We have a lot of that capability already, and accelerating HIMARS and GMLRS will give us more of that mass.

Point number two, and I think it's an important part of this recommendation that we're making to the Congress, is not just to terminate Crusader, but to keep that money in Army indirect fires. And I do think that one of the reasons for the phenomenon that you were describing and you were concerned about is I believe the concern on the part of the Army that if they say, "Here's a savings that we can offer in order to get something that's more efficient," before they know it, the savings will be taken and the efficiency will not be provided.

This is a two-part recommendation. It is a recommendation to terminate Crusader, but to keep that money in systems that we vitally need. And if we don't make good on that second part of it, the kind of resistance that you're describing will just grow.

SEN. SANTORUM: Mr. Chairman, I know my time is up, but I do want to make a point that the second part of your recommendation is vital, that we need to fund these -- the objective force more robustly, and we've done so in our subcommittee above what even you recommended, and we do need to work to make the Army more relevant to the fighting of today.

SEN. LEVIN: Senator Akaka.

SEN. DANIEL AKAKA (D-HI): Thank you very much, Mr. Chairman. I appreciate your willingness to hold this hearing so quickly. And I want to thank the Secretary Rumsfeld and General Shinseki for joining us this afternoon. And I want to say thanks to Secretary Aldridge for dropping by and to help me understand what's going on.

I want to join others in telling you that I am disturbed and concerned about the way the Department of Defense has handled the Crusader program in the past few weeks. In most situations, I consider the secretary of Defense to be the expert, expert on the needs of the men and women serving in the armed forces. I rely on his advice and direction for what the department needs to execute its mission of preserving our national security. A lot of my trust in his expertise and advice of his staff is based on my believe that he relies upon those in the department, both uniform and civilian, to determine what is best for the Department of Defense.

I am having a very difficult time with this issue, because it seems apparent to me that the Army is not being heard on this issue.

I understand and support the need to transform the Army to be a lighter and more lethal force. I wholeheartedly support efforts to improve the technology necessary for the United States to maintain its superiority in the battlefield. I also, however, value the opinion of those who utilize the weapon system under discussion and must rely upon it for the safety of our men and women in the military.

I'm concerned with the precedent this action sets with respect to the department's budget request. We rely heavily on the president's budget request to shape the authorization and appropriations legislation for the Department of Defense. The department's modification regarding Crusader so late in the process causes me to wonder whether this is going to be a continued practice by the department. Normally, when the budget request is received for a fiscal year, we rely on the information provided.

My question to you is, are we now to expect that the budget requests we will receive in the future be subject to such changes and should not be relied upon as reflective of the department's priorities for the upcoming fiscal year?

SEC. RUMSFELD: Senator, just to walk through the process, of course, we start working in the Department of Defense on the budget for the year 2003 in the spring of 2001. It then is worked on and brought along with the services, and then with the Office of the Secretary of Defense, and it's sent over to the Office of Management and Budget in about November of 2001. It then is decided by the president and sent to the Congress February 1st of 2002 -- this year. This is for the year 2003. And the Congress starts working on it in February, March, April, May, June, July, all the way through the year until it's finally passed the authorization, the appropriation, the supplementals, whatever it may be, and it starts on October 1st.

This is a fast-moving world. There inevitably are going to be amendments proposed to budgets that are fashioned a year and a half earlier. There isn't any other way to do it that I know of.

And I feel our obligation is that as we proceed with our work and as we develop defense strategy and go through the Quadrennial Defense Review, and as we take the proposals from the services and meld them together into something that makes sense from a joint standpoint, not from a service standpoint -- it's interesting what the services propose, but it's not determinative, it shouldn't be, because the warfighter does not go out and fight with the Army or fight with the Navy, he fights with all of those capabilities together, as you well know.

So I guess the answer is, Senator, yes, there will continue to be amendments proposed. I don't know of anything that can be done about it. I wish there were some other solution.

SEN. AKAKA: Can you tell us -- as I said, I've been bothered by what has happened the last few weeks, and I've wondered about what a motive that has come about. Can you tell us where the option of cancelling the Crusader came from?

Was this something that was first advanced by the resource community -- the acquisition experts within the Department or somewhere else in DOD? I'm trying to understand the primary rationale and what it is behind your decision. Can you explain that, please?

MR. WOLFOWITZ: Senator, let me try to explain. Over the course of the first months of this year, as we were developing the Defense Planning Guidance to develop the '04 budget, we heard increasingly, particularly from the staff, the undersecretary for Acquisition, the staff of Program Analysis and Evaluation but also from outside experts, including some retired Army officers, including some senior generals, from some members of the Army Science Board and from people in DARPA, that the real alternative to Crusader was not simply Paladin, that looking at it in terms of platforms was the wrong way to look at it, that the right way to look at it was in terms of technology, particularly the technology of precision. And it was that analysis and that study which was quite considerable and consumed many hours that eventually led Undersecretary Aldridge to come forward to me late in that process of developing the Planning Guidance, with the recommendation that there was this clearly better way to spend that money than to continue down the road with Crusader. And that's how we got to this recommendation.

SEN. AKAKA: Thank you very much.

Thank you, Mr. Chairman.

MR. : Mr. Chairman, while we're --

SEN. BYRD: Senator Bunning, you're recognized.

SEN. JIM BUNNING (R-KY): Thank you, Senator. I appreciate that.

First of all, I'd like to enter into the record a letter, July 5th, 2001, to General Henry H. Shelton from General Shinseki. For the record, I would like it to be put in.

SEN. BYRD: Without objection.

SEN. BUNNING: I'm embarrassed. I'm embarrassed for all three of you, Undersecretary Aldridge, Deputy Secretary Wolfowitz and Secretary of Defense, to come before this committee with a predetermined decision and no consultation with the Congress of the United States. After the QDR was finished, after all of the process that you went through to come up with the budget for the 2003 military and then to hear the explanation you have given not only Senator Inhofe but almost everybody who's asked the question, how quickly you changed that decision. Once it became public, it went from 60 days to 30 days, and it went to four days just like that. Now it's hard for me to trust that decision.

We honored a president of the United States today who always said, "Trust but verify." I'm having a very big problem verifying the decision you have made with all of he explanations you have given today.

Let me ask you if this is accurate, because what we read sometimes doesn't have a darn thing to do with accuracy. In eastern Afghanistan at dawn March 2, U.S. troops assaulted Taliban and al Qaeda strongholds deep in the mountains, with the expectation that 25 minutes of planned airstrikes had softened or eliminated enemy resistance as Operation Anaconda kicked off. When the U.S. bombers and strike force had gone, the enemy popped out and took deadly aim at the troops that had come from my Fort Campbell, the 110th Mountain and the 101st Airborne, sprinting off their helicopters. Back at U.S. military headquarters, staff officers frantically demanded more airstrikes as units on the ground reported being under heavy mortar fire, and requested immediate evacuation of their wounded.

One of the officers at the 110th Mountain Division asked for helicopters. "It's too risky," they were told. The artillery that the Army would normally use in this situation had been left at home, and instead, the troops were depending on air support. Now, is that accurate or inaccurate?

SEC. RUMSFELD: I would have to -- Senator, I would have to ask General (Tommy) Franks to ask the commander who was in charge of Anaconda to track back and trace that. I do know one piece of it that you and I have talked about, and that is the artillery issue. And when you asked me that question in a private meeting, I asked with General Franks about the question as to artillery and was advised that the -- someone had made a request of the land component commander as to whether or not they were going to bring their artillery with them when they deployed to Afghanistan, and the decision was made, apparently, below General Franks by the land component commander that the artillery would not be appropriate in that situation, and they instead, as I recall, brought mortars. And that's -- but I do not know technically the other pieces of it, and I would be happy to track it down.

SEN. BUNNING: Could you, Mr. Secretary, have General Franks at least give us the courtesy of verifying one way or the other whether that was factual, or whether it wasn't?

SEC. RUMSFELD: I would be happy to do so.

SEN. BUNNING: I remember also a while back when you and Secretary Wolfowitz and Secretary Aldridge -- or, Undersecretary Aldridge came before this committee and asked for verification of your positions. And you told us -- and I asked one question, I mean, of all of you: you have to tell us the truth. And I asked the same thing of the military people who were sworn in. I mean, the secretary of the Army, secretary of the Navy, secretary of the Air Force. And I hope and pray to God that that's what we're getting today. And I'm having difficulty because of the circumstances under which this program has been cancelled.

Now, you're supposed to be the experts. But I don't think anybody on this committee had any idea of what your intentions were when you submitted that budget. And it wasn't until the day that this committee went into mark-ups on the subcommittee level on this year's budget that we got wind of anything about the Crusader. Now, either that's poor timing, or that's the way you wanted it. I don't know. I -- maybe you can explain that to me. But we were -- we were going into mark-up on the defense authorization bill in the subcommittees the day we heard about the Crusader. Can somebody answer that?

SEC. RUMSFELD: I'd be happy to.

Would you put the other chart back up?

Senator, the way the -- the way this process works is that the Congress, one house or the other, is continuously meeting on either a supplemental or a(n) authorization --

SEN. BUNNING: I've seen -- I was here when you had the chart up.

SEC. RUMSFELD: Okay. Yeah. And there are, I think, just a handful of days where some body of the Congress, committee or the whole House or Senate, is not engaged in some aspect of the budget.

The budget, as I just said, is one that we prepared last year and submitted -- worked over the summer into the fall, submitted to OMB in November, sent up here in February. There inevitably are going to be amendments to it. I don't know -- I don't know any other way that we can do business. And as we go through the defense planning process, defense guidance process for '04-'09, which is what we're in right now, and which studies are being done, and which will end and we'll then build the budget in the summer and fall, we're going to have decisions come along. And then the question is, what do you do with those? If you -- if you have the study complete, if you've done your work, if you come to a conclusion, or if you -- whatever changes, changes, and you see where you are, and you say, well, should we tell them now, since that's where we are, or shouldn't we? And if we wait, more money is spent.

And it is awkward, I agree with you. To have it in the middle of a markup is not your first choice.

SEN. BUNNING: Well, we're having difficulty getting a budget to the floor for one year in the Senate --

SEC. RUMSFELD: Right.

SEN. BUNNING: -- as you might suspect. So -- my time is up, I understand it, Mr. Chairman. So I have some very serious reservations about your program. Thank you.

SEN. LEVIN: Thank you very much.

Senator Byrd?

SEN. BYRD: Mr. Secretary, I come to this question today without feeling very sure-footed about where I'm going to come down on it. As has been the case in many instances over the years, I think I have to give you great credit for your courage in cancelling a weapons system. This isn't something that's done every 24 hours here. So you're entitled to a great deal of credit for having made a tough decision. I think I might be able to imagine, at least, the pressures that were on you.

Having said that, I'm not -- I'm not, in my own mind, convinced one way or the other yet.

Let me ask you a question on another question -- on another issue, if I might. During the past 24 hours, new details as to who knew what and when about the September 11 attacks have surfaced. President Bush, and many of his top advisers, were told by the CIA on August 7 that Osama bin Laden planned to hijack commercial airliners.

Mr. Secretary, were you aware of this CIA report?

SEC. RUMSFELD: Let me take my time and respond very carefully about that.

SEN. BYRD: Sure.

SEC. RUMSFELD: I get daily -- well, maybe four days a week on the average, I get a briefing from the Central Intelligence Agency, as do any number of senior people. There are interruptions from time to time; you read through it and you ask questions and give assignments of additional work you'd like done, and sometimes you keep some of the less classified materials to read at a later time.

Anyone who gets those briefings is at a senior level and is not the individual who is the person who would take action on an actionable piece of intelligence. So I don't want to leave the impression that what I'm going to say next is necessarily correct. But to my knowledge, there was no such warning, no alert about suicide hijackers or anything. There have been concerns about hijacking for months and years.

I mean, that's why we have air marshals. That's why people have worried about hijacking for a long time. But I don't -- certainly don't recall having ever been presented or ever read anything that suggested anyone was going to hijack an airplane and fly it into a building.

On the other hand, one has to assume that there was not sufficient granularity to issue specific warnings, or specific warnings would have been issued, had there been anything that would have been sufficiently actionable of the nature that you've described.

In my view, as far as I'm aware, the people responsible for taking appropriate action took action that was appropriate, given the nature of the intelligence. And I know that from time to time, the Department of State issues warnings to their various embassies in parts of the world, to the effect that they ought to be on notice, high alert, or they ought to move their people out of the embassy. We do that constantly. Our combatant commanders have that responsibility for force protection, as you well know, and they are every day changing alert levels, depending on how -- their assessment of that information.

But I -- in my view, I have not seen anything authoritative; all I've done is seen an article in the paper. And I think it would be grossly inaccurate to suggest that the president had a warning of suicide hijackers about September 11th.

There's no question but that there were and are today daily repeated warnings about various types of threats, all across the globe, which are looked at by people who care about this country and care about U.S. interests and take actions that are appropriate. A very small fraction of them are the kinds of intelligence that one would characterize as actionable -- for example, a specific threat on a specific ship in a specific port. And therefore you might build your force protection, or you might get the ship out of port so you don't have another situation like the USS Cole. Those things are constantly being done.

But anything that would be characterized as what I have seen in the press, that would suggest that the president had or should have had or might have had actionable intelligence with respect to what took place on September 11th, I think, would be grossly inaccurate.

SEN. BYRD: When were you aware of this intelligence report?

SEC. RUMSFELD: First of all, I'm not sure it wasn't in a -- and when we say "intelligence report," I think we think of the Central Intelligence Agency. My impression is that what I look at tends to be fused intelligence. It will come from all intelligence sources, including the FBI. And it's not clear to me that I would want to differentiate as to where this came from, because I simply don't know.

I certainly saw -- don't recall anything about the flight schools, for example, in Arizona, until well after September 11th.

SEN. BYRD: And I know that hindsight's pretty good. It's 20-20, or better, I guess. Can it get better?

SEC. RUMSFELD: (Chuckles.)

SEN. BYRD: I also know that the intelligence community must receive hundreds, as --

SEC. RUMSFELD: Oh, thousands!

SEN. BYRD: -- thousands of tips on a regular basis, and sifting through these must be not only a time-consuming job, but a very frustrating one.

But this alert, this threat, was strong enough to present to the president of the United States, so it had to be serious.

My concern is that the threat, like the FBI memo, dated July 10, that warned of bin Laden's use of flight schools -- which you just mentioned -- to train for terror attacks, was virtually ignored.

These are -- were you about to comment on that?

SEC. RUMSFELD: I think that that would not be a -- I think any implication that it was ignored -- that the president had it and it was ignored by the president, it seems to me, would not be correct; but I'm really not the right person to be asked about this. As I say, I have so many things that I do, and one of them is not that. I scan them. And you said something had to be sufficiently important to be presented to the president. I think that may be a misreading of the situation.

Not surprisingly, it is not threats -- you cannot validate, generally, without a lot of work. And as the threats come in, they then -- the work goes into the process of trying to validate them. The question is, what does one do -- if their task is to fuse intelligence and present it to policymakers, ought they to present a threat unvalidated? And the answer is, sometimes yes, sometimes no. And they do sometimes. So the number of threats that we see at that level are not a few, they're quite a few.

SEN. BYRD: Yes.

SEC. RUMSFELD: And most are not correct. Most prove not to have been the case. Most prove not to have been actionable.

SEN. BYRD: Yes.

The CIA -- I realize my time's up. The CIA briefing was presented, as I understand it, to the president at his Crawford ranch on August 7. The intelligence community certainly knew of the potential of Osama bin Laden and his terrorist network -- there is a track record of bin Laden using aircraft as weapons. He reportedly tried to -- he tried such a tactic in Paris in an effort to destroy the Eiffel Tower. His plans were thwarted by the SWAT team when it shot the terrorists.

In light of the alert and the Paris incident and the knowledge that bin Laden's terrorist network is well trained, let me ask this question as a closing question: Why was it that AWACS radar planes were not sent aloft to guard against this danger? It seems to me this would be something in your bailiwick. Why was it that AWACS radar planes were not sent aloft to guard against this danger, to monitor for rogue or hijacked aircraft? Why were those planes left on the ground until after the attacks occurred? Could you answer that? SEC. RUMSFELD: Senator, I can't -- in answering, I would not want to validate the premises in your question, because I am not knowledgeable enough about what you've said. I don't know what the president was briefed or when he was briefed or where he was briefed about what. I just really cannot address that.

SEN. BYRD: Well, I can appreciate your answer, but it seems to me that the AWACS radar planes, in the light of the track record of Osama bin Laden, it seems to me that the AWACS radar planes should have been sent aloft to guard against this danger. And so I'm concerned as to why those planes were not sent aloft until after the attacks occurred.

SEC. RUMSFELD: Well, I guess the answer would be that the people who deal with that very likely had no reason to believe that the hijackers would take planes filled with Americans, and for the first time in the history of our country, fly them into buildings. It was an event that was unprecedented. It had not ever been done before in our country.

It -- the minute -- the hijacking problem was a continued threat for many years beforehand, and we all knew that. But the way that was dealt with was entirely differently. The airplanes were equipped with beacons and indicators, radio signals that they could send if they were in a hijack situation. The FAA had procedures. And it is perfectly possible to put planes on alert and track things once that hijacking alert goes out. But that is a very different thing from what took place on September 11th.

Mr. Secretary, first of all I want to say that I support fully your decision. I know it was not an easy one. I know it's always difficult and very disappointing to large numbers of supporters of a very excellent weapon system.

I also know that other tough decisions are going to have to be made in the future, and this is only the first, since anyone who looks at the projected number of weapon systems that are on the drawing board or proposed or in various stages of development, we will not have sufficient funds to fully fund all of these systems.

I think Senator Lieberman already referred to the "Transforming Defense: National Security in the 21st Century" report in December 1997. Back in 1997, they concluded, as far as land forces are concerned: become more expeditionary, fast, shock-exploiting forces of great urban operations capability, reduce systems that are difficult to move and support, shift to lighter, more agile, automated systems."

As far back as 1997, we were pretty aware that there has to be a transition and a transformation as a result of the end of the Cold War and the new challenges that we face. In Kosovo, Bosnia and in Afghanistan, again it was proved the efficacy and, indeed, the requirement for precision-guided weapons and, frankly, a kind of mobility that even those of us who study these issues were probably not aware of.

I'd also add, Mr. Secretary, that during the presidential campaign, I had the privilege of campaigning with the president. He stated unequivocally on numerous occasions, all over America, that we had to transform our military establishment; that changes had to be made, and that tough decisions had to be made and he was fully prepared to make them. And I know you didn't make this decision without full consultation and approval of the president of the United States.

Finally, let me say, I've seen this debate going on about the timing and what day, this, that -- you know, I'm a bit entertained, Mr. Secretary, because just last December, I happened to be combing through the Defense appropriations -- not authorization bill, and find that we're going to (lease ?) purchase 107 67s. I didn't hear any complaints about some kind of a timing or -- we didn't even have a hearing. We didn't have a hearing. The chairman of the committee was not even consulted.

There was not a phone call from your secretary of the Air Force to the chairman of this committee to obligate this -- the taxpayers of America to somewhere around $26 billion. So the arguments that you didn't adhere to some certain time schedule, frankly, is (sic) not too persuasive when the way that we are doing business around here by putting in billions and billions of dollars into the defense appropriations bill, which we always consider last and vote on just before we go home for Christmas, is not exactly a model, I would think, for any kind of process in making decisions as far as our nation's defense is concerned. And someday, maybe, this committee will re-assert its jurisdiction and authority. At least I will continue to work in that direction.

So, Mr. Secretary, I know there's no good time for a decision such as this. There is no good time. Not Christmas Day, not the -- when we are going into mark-up, not any other day. And I wish that circumstances would have been such that we could have fully briefed every member of this committee, which the Appropriations Committee does not do, when they are putting the defense appropriations bill together.

I guess I would just ask a couple of questions. For example, the Paladin is supposedly 40 years old. Is that true?

SEC. RUMSFELD: Well, I'm no expert, and Senator Inhofe and I have talked about this. There's no question but that the basic artillery piece started decades ago, which, of course, is also true of most of our weapons. The F-16s, they go to --

SEN. MCCAIN: Under this kind of calculation, the F-18 would be about -- 40 years old?

SEC. RUMSFELD: I guess. And the fact is that the Paladin that we now have is about five and half, six -- five-point-six or six- point-six years old, average age. And it was entered into the force in its current configuration in 1992 after the Desert Storm, and that there are elements of it that preceded that --

SEN. MCCAIN: By the way, Mr. Secretary, you know that the engines for the Crusader is made in Arizona, and lot of the testing of the Crusader would take place at the Yuma Proving Ground in Arizona. So I take that into consideration, as you do, as to where these equipment -- these weapons systems are manufactured and where they will be employed and tested. But I am of some confidence that the artillery systems that you are putting in place, earmarked for the United States Army, will be -- require expenditure of funds, testing and development, et cetera. Is that -- isn't that an accurate statement here?

SEC. RUMSFELD: The --

(To Mr. Aldridge) Would you respond to that, please? Go ahead.

MR. ALDRIDGE: There is no question that, in fact, we're not talking about reducing the Army budget, reducing the budget for Army artillery. In fact, I believe that actually by investing more in systems that have I think a longer future to them and accelerating those systems and keeping Army artillery relevant for future battlefields, I think if -- one's talking about sort of business or commercial interests, and then I think we actually are enhancing the future of artillery.

SEN. MCCAIN: Mr. Secretary, what role would the Crusader have played in Afghanistan?

SEC. RUMSFELD: That's a question I think that probably would be better asked of General Franks. But the period of systematic, organized ground action was relatively brief. And the deployment of Crusader is not a simple matter. It is a complex matter. You have to either have a port, or you have to have airfields that can take those aircraft and that are sufficiently secure from attack that you can get them off the aircraft and get them put -- reassembled, put back together and then find ways to get them from where that airfield is to where the battle is.

And that is not an easy thing, given the weight. It's a heavy piece of equipment.

SEN. MCCAIN: In Kosovo, the entire operation was carried out from the air, and as I recollect it, the war in Afghanistan was primarily from the air until we reached a sort of mopping-up operation. But the initial battles, such as outside of Kandahar and other places, using Northern Alliance troops but with the major weapons being precision-guided missiles from the air -- is that an accurate --

SEC. RUMSFELD: That's true, but that didn't work until we had forces on the ground embedded with those militias in a way that they could provide the targeting, provide the coordination that began to make just an enormous difference.

SEN. MCCAIN: My time is expired, Mr. Secretary. I hope that you succeed here, and I think that all of us should be aware that if you fail here, it will be very difficult to make any other much-needed changes and transformations that you committed to at your confirmation hearings in response to questions from the members of this committee. I thank you.

Thank you, Mr. Chairman.

SEN. LEVIN: Thank you, Senator McCain.

Senator Collins.

SEN. WARNER: Mr.Chairman, could I address the chair before my colleague starts?

We have a second panel with General Shinseki, who is waiting. And I would strongly recommend that we not go to another round of questions following the exercise of the question period by those who haven't. In fairness to him, he's been waiting for some period of time, and frankly, I think those reporters and others following this hearing would want to hear firsthand his views, frankly, before the newspapers have to go to bed, as the old saying says, or the news cycle is gone. So I strongly recommend -- the Secretary has fully replied -- good statements and so forth.

SEN. LEVIN: Even though --

SEN. WARNER: (Inaudible) -- that could be done.

SEN. LEVIN: Even though I thought the media was 24/7 these days, never goes to bed, never rests --

SEN. WARNER: They may.

SEN. LEVIN: I think it's a good suggestion, unless there's some -- is there any opposition to that idea, that we go directly from this round to General Shinseki? I know there's no opposition on my side. (Laughter.)

By the way, relative to that, Senator Dayton had to leave to preside, and he will be back after his hour of presiding is over at 7:00, as I'm sure we're still going to be here. But he's very vitally interested in this subject.

So if there's no objection, we will just have one round of questioning, and then we'll go to General Shinseki. Okay? Is that all right with everybody?

Senator Collins.

Thank you for the suggestion.

SEN. WARNER: Thank you, Mr. Chairman.

SEN. SUSAN COLLINS (R-ME): Mr. Secretary, senior Army leadership, from the secretary to the vice chief of staff, have testified repeatedly before this committee about the transformational capabilities of the Crusader. Strong testimony from the Army was given as recently as March 14th before this committee. Did you consult with senior Army officials and the secretary before making your decision, or did you essentially inform them of your decision?

SEC. RUMSFELD: Senator, the -- I guess the answer is, we went through a process over a year and a half, where we had meeting after meeting after meeting. The Crusader was discussed in any number of meetings with the civilian and the military leadership of the department.

The technical question of did someone consult before the final decision was made it seems to me is an awkward one, because what took place was that I was out of town, and the deputy was chairing a series of meetings during the week. I was in Afghanistan and the neighboring countries. And I came back and it ended up, before he made a final recommendation to me, and before I ever spoke to the president, it was in the press. It had leaked to the contractors. The contractors had called the Congress. The old Iron Triangle worked in real time, just magic. And as Senator Bunning said, there's no question but that it ends up being untidy. I don't know quite what one does about it in Washington, D.C., when you have the intimate relationships between the contractors and the Congress and the Department of Defense. And everyone has an interest, and everyone's interested, and the minute someone hears something, before someone even finished a meeting, they were receiving phone calls about the issue.

Now, I think the answer is that the senior Army officials had, over a period of a year and a half, a great deal of involvement in this. They briefed me. They briefed the deputy secretary. On the other hand, it is perfectly possible for someone to say at the last moment, they did not know the last decision. But that's true with everything, with me, with the president. The president -- we have interagency things, just as we do in the Pentagon. We have inter- service things. And when the services make their recommendations, it comes up, and they have to be melded together at some point, because the combatant commanders don't fight Army or Navy or Air Force, they fight joint. And they have to. So someone has to pull that together.

SEN. COLLINS: That's certainly true. What I'm trying to determine was the extensiveness of consultations and whether or not you would disagree with press reports that said that Army officials were surprised by your decision.

SEC. RUMSFELD: There's no question but that a single person in the Army could say they were surprised. There's also no question but that I could say I'm surprised when we have a big interagency discussion, and the president goes off and makes his decision. I'm not in the room when he makes his final decision, and he announced it. That's the way it is in big, complicated organizations.

SEN. COLLINS: I'm not talking about a single member of the Army. I'm talking about the senior leadership of the Army.

SEC. RUMSFELD: Well, the deputy secretary was dealing with them every day. You might want to --

MR. WOLFOWITZ: We had months of intensive discussions with the Army at all levels, including staff levels, including my level with the secretary of the Army and a great deal of exchange of views. As the secretary has said, when it came to the final moments of the decision, who was in the room is a different issue. But we had extensive discussions with the Army about both about Crusader and also as these alternatives developed.

SEN. COLLINS: Undersecretary Aldridge, defense programs that have been cancelled in recent years have for the most part been cancelled because they were in violation of the Nunn-McCurdy law. What is the cost status of the Crusader program? Were there any significant cost overrun or any breaches of the Nunn-McCurdy law?

MR. ALDRIDGE: There's only been one program that I'm aware of that's been terminated based on Nunn-McCurdy. That was the Navy area system that I had -- I did not certify.

There was no problem with the Crusader program. It was under a -- it's in system development and demonstration phase, which is essentially the engineering and development phase. The decision was going to be made to enter into that phase in April of '03, so it has not entered into engineering development as of this date.

The program was on schedule, was in the -- within the cost estimate. There was some uncertainty with regard to performance, with regard to its weight. They were -- still had problems in getting its weight down. But it was not an issue of canceling a sick program. The program was proceeding. It was a question of what is the right alternative to the program, not because it was in trouble.

SEN. COLLINS: Mr. Secretary, Senator Santorum mentioned the issue of the manning, the personnel costs of DOD. And people are expensive. There are lifetime costs associated with that.

It's my understanding that the total crew for the Crusader, for both the howitzer and the resupply vehicle, is only six people, where you would have to have for the Paladin a total of 27 members of the crew to have the equivalent firepower. What was your assessment as far as the life cycle costs and the manning cost for the two systems?

MR. ALDRIDGE: Yeah, let me address that. The -- certainly the -- as we have said on numerous occasions, it was not a question of Crusader versus Paladin. I mean, we understand; the Paladin is an older system, although it's still only six and a half years average age. But the Crusader was going to be a better system with a better gun, with a better cockpit, with more data and so forth.

But as we look into the future, if we go to the Future Combat System, which there is no disagreement between the Office of the Secretary of Defense and the Army as to the ultimate objective. The Future Combat System is the right direction, with all of its lethality and mobility and survivability, et cetera. So the question was, where -- we were heading in that direction, and Crusader got in the way because it was a $9 billion bill that prohibited us from moving in that direction as fast as we would like to have gone.

When we get to that Future Combat System, we're going to be looking at a lot fewer manning per unit. For example, the NetFires concept, which is a(n) essentially 15-tube missile in a box that is highly mobile, has -- takes only two people to run the whole thing. So it doesn't require all the firepower and manning, and it could be operated much less expensively than any of the -- even Crusader or Paladin.

So we need to move in that direction. We need to get there faster, and that's what the reallocation of these resources will allow us to do. And while we're getting there, we can make the old artillery even much more effective. Excalibur gets into the field two years earlier. It's much more accurate and -- than it would be with Crusader, because Crusader was going to deliver Excalibur in the year '08, with -- associated with Crusader. We can actually now make it available for Paladin, for the lightweight 155, and for any other artillery gun that will carry that 155, including our allies.

SEN. COLLINS: Thank you, Mr. Chairman.

SEN. LEVIN: Thank you very much, Senator Collins.

Senator Hutchinson.

SEN. TIM HUTCHINSON (R-AR): Thank you, Mr. Chairman. And I know we -- General Shinseki's been waiting patiently, and I'll try to be brief. And much of this has been hashed and rehashed. And I was gone part of it, so forgive me.

I know there's been some acknowledgement -- we've all got parochial interests. We -- I think everybody o this committee and hopefully everybody in the Senate and the Congress cares most of all about our country and the defense of our country. But we also care about jobs in our states, in our communities, and these programs all involve that.

The department has indicated that the Crusader funds might be used for transformational weapons systems like the MLRS system and the HIMARS, both of which are produced in Camden, Arkansas. So I have an interest in this as well.

If I could just ask Secretary Wolfowitz to kind of help me in walking through the time line on the decision-making process in recommending termination of the Crusader, I know that the chairman went through this, and I was scribbling down dates and making notes, and I'm sure I didn't get it all right.

April 29th there was, I understand, a Secretary Aldridge recommendation for termination. And at some point there was a discussion with Secretary White. And Secretary White, who had reservations about that recommendation, asked for a 60-day review, and that there was a decision then to give a 30-day review of that recommendation, or a further analysis.

Am I on track on those dates at all? Or help me out, Paul.

MR. WOLFOWITZ: But let me back up because it was a long process that began long before April 29th. And forgive me if I'm repeating things that you heard already, but I think you may have been out of the room.

Starting early this year, we began both looking at how to present the issue -- the argument for Crusader in the context of the '03 budget. We also began to work on the Defense Planning Guidance that would guide the '04 budget. And over the course of those briefings and discussions and extensive analyses by civilian staffs of the undersecretary of Defense for Acquisition, the Office of PA&E, a number of outside people we consulted with, including retired generals, we increasingly, frankly, had some doubts about the strength of the case for Crusader. But more importantly, we developed a much stronger appreciation of what the real alternatives were, and that the real alternatives were precision systems and lighter systems like the HIMARS or the NetFires or the Future Combat System.

So all of that started to come together in April. And I'm sorry Senator Bunning isn't here, but I think it is important to emphasize, at every step in this process we have tried to be as clear and direct with Congress as we can. We don't turn off our brains on the '04 budget when we're up here talking about the '03 budget. I was asked by the chairman on April 9th about Crusader, and as I said earlier, what I said then is that Crusader is a system that brings us some dramatic new capabilities, but if we can bring forward some of the transformational capabilities more rapidly, we might see ways to put that Crusader technology into a different system. That was on April 9th.

By April 29th, Secretary Aldridge had come to me with a very specific proposal for how to do exactly that. We met with Secretary White on the evening of April 29th, discussed that alternative and my decision I believed we should proceed in that direction. He said he wanted to think about it overnight. He left my office. It turned out even as we were meeting, we were starting to get phone calls because of that (inaudible) triangle of communication that the secretary referred to.

He came back the next morning, May 1st, said he would like 60 days to study the alternative. We said we'd consider that; told him in the afternoon that that was too long, given where this body was in its deliberations about the budget. We thought we could do it in 30 days. But frankly, the enormous amount of debate and discussion that had been generated by those leaks and, I think, to some extent by the unfortunate talking points, made it clear that if we're going to have information here in a timely way for this committee to make its decisions, we had to do our analysis faster. And that's how we got to where we are.

And we have, in fact, completed that analysis. Secretary Aldridge's office and the Army have come to an agreement about the right way to design that alternative, and we will be presenting that here shortly in detail.

SEN. HUTCHINSON: It just seems to me, I think --

SEN. LEVIN: I didn't quite hear; what will be here shortly? Excuse me.

MR. WOLFOWITZ: The specific allocation of money in the budget amendment will be here shortly.

SEN. HUTCHINSON: That is as to where you would recommend the Crusader funds -- how that would be used for other transformational programs.

MR. WOLFOWITZ: Right.

SEN. HUTCHINSON: The question that the chairman asked at one point was, what happened between May 2nd and May 8th? There was an agreement or there was a decision to give 30 days of further analysis and review, and we ended up with a decision that happened much, much quicker. And though we can talk about expedited analysis, it seems to me what really happened was that there were talking points, that there were leaks. By the way, my office didn't get those talking points. I don't know how we got left out of the loop on that, but -- (laughter). But that's really what happened. And that seems to me that, as far as further analysis, further review or further evidentiary -- gaining greater knowledge on it, that that really wasn't what happened, that really wasn't the issue. The issue was that we had leaks, we had talking points, and therefore, without regard to 30 days of additional analysis and review, here was the final decision.

I understand that you feel quite satisfied that sufficient -- that decision-making process had been long and there was complete analysis and that you're satisfied with the decision, but the fact in my mind is there was an agreement, we're going to look at this 30 days more, and that ended up being truncated for a May 8th announcement or a recommendation.

So do you, Mr. Secretary, Secretary Rumsfeld -- just for my comfort level -- do you anticipate making other cancellation recommendations on programs in the coming weeks?

SEC. RUMSFELD: Senator, if I knew of any, I would do them today, because time is money. And I don't know if you were here when I mentioned about our defense planning guidance process, but we really had four baskets. We said in the first instance, do this, and we don't want to discuss it anymore. Second is, come back with several options, but make sure one of the options is this because we think that's the best option. And the third is, come back with options of any type, we don't have an opinion. And the fourth was, come back with a plan as to how we can improve some capability that this country needs.

A whole series of programs were put in those various baskets, and those studies will be coming along in the next 30, 60, 90, 100 days, someplace six months. We would like to see that we could get them done as we build the '04-to-'09 budget. That's our job.

SEN. HUTCHINSON: Mr. Secretary, you know where those baskets are a lot better than I do, and you know where all of those are in the process. And my question was, do you anticipate any of those coming to the point that you're going to be making those decisions and recommendations in the coming weeks?

SEC. RUMSFELD: And my answer was, to the best of my ability, if I knew one, I could tell you right now. I do not know how those studies are going to come out. I just can't know.

SEN. HUTCHINSON: Mr. Chairman, as Senator McCain said, there's never a good time to make a tough decision. I agree with that. There is not a good time and there may not be a good way, but there's certainly a bad time and there's a bad way. And from my perspective, there was some mishandling of this decision-making process.

Thank you, Mr. Chairman.

SEN. LEVIN: Thank you, Senator Hutchinson.

Senator Reed.

SEN. JACK REED (D-RI): Thank you, Mr. Chairman.

And I recognize it's been a long afternoon. I have one general question. But I also recognize that this is a tough decision that you've made, Mr. Secretary. And regardless of the conclusion, I think we recognize the fact that you're not shy about making tough decisions, and that's a quality that I think should be recognized in the secretary of Defense.

A lot of what we're all speculating about is what the battlefield of the future looks like. And I just want to get your response to the notion that somehow related to eliminating Crusader is perhaps the perception that we won't be fighting in the future with heavy forces -- with tanks, with self-propelled artillery, with mechanized infantry -- that the battlefield will look a lot more like Afghanistan and other places than it does the central plains of Europe, or previous scenarios. I think if we -- that is an important question, because the United States Army is not the sole force for that type of warfare, but it's one key mission. And there's concern that this decision goes beyond simply one system, but embraces a view of what the battlefield of the future will look like. And I would just like to have your comment about that. Frankly, I guess one could argue that if we do feel in the future we're fighting with heavy forces, particularly if we feel that our opponents might be capable one day of denying us space assets like GPS, of operating in a toxic environment, that this Crusader looks a lot better than it does today when we're making the match-up based upon recent experience in Afghanistan.

SEC. RUMSFELD: Senator, that's an important question. And there is no question in my mind but that the Army -- that this decision ought not to be interpreted in any way as suggesting that the United States is not going to need an army, or that we're not going to need artillery. We are. If for no other reason, the deterrent effect of having that capability is what keeps other countries from developing those capabilities and believing them -- that they can use them against us. So the fact that every aspect of the United States Army did not end up being used in Afghanistan, which was a distinctly different -- and I would submit, unique, somewhat -- it is almost -- maybe it is unique. It's landlocked, it's a long way from here. It's got difficult situations on its borders. It's mountainous. Porous borders. So I think we ought not to think that Afghanistan is the model for the future.

I do think that our forces are going to have to be -- we're going to have to have capabilities that we will characterize with respect to some of our forces, a good portion of our forces, that are light, that are rapidly deployable, that are lethal and precise. That doesn't mean that the other capabilities aren't going to be needed. So I -- it's not an accident that we're suggesting that the funds from this particular weapons system stay with the Army and provide the kinds of things that were on that earlier chart.

SEN. REED: Well, thank you, Mr. Secretary. Again, this has been a long hearing, and we still have not heard from General Shinseki. And I think the difficulty of your choice has now been visited upon us. Thank you very much.

SEC. RUMSFELD: Thank you.

Mr. Chairman?

SEN. LEVIN: Are we -- I believe that Senator Sessions has not had a round.

Mr. Secretary, I just want to tell you, you've done a tremendous job as the secretary of Defense of this country -- even better the second time.

And you have really served us well. You understand the complexities of modern warfare, and you know the history of American military. And I know this has not been an easy decision.

I have people I respect on both sides of the issue, and my respect for Jim Inhofe is just unbounded. There's nobody in this -- on this committee who's spent more time seeing the troops, talking about these issues than he. But I'm inclined to believe that we just got to make this move. I intend to support you in it. It's quite possible, I believe, that we could leap ahead.

Tell us about this money. We've got eight or so billion dollars, 9 billion left to spend. If we stop this program, can you accelerate some of these other programs that are out there in our plans? Can they actually be speeded up if you make this decision?

SEC. RUMSFELD: I think two things happen: The first thing is, something bad doesn't happen. And that is that, as we go forward to the bow wave, the Crusader will not shove out future combat system farther than it already is. And I think that's a good thing.

Second, we do hope to --

SEN. SESSIONS: When you say "shove out our goal to reach the future combat system," it's being shoved out because the money isn't there to bring the future combat system up sooner, because it --

SEC. RUMSFELD: The bow wave that we would face if we had all of these programs and platforms in the budget -- the bow wave, as they go up and become, at the stage of deployment, starts going up like this. That means everything gets squeezed. And what gets squeezed is what does not exist. And what does not yet exist is the future combat system.

So there's no doubt in my mind but that the funds can, in fact, strengthen the Paladin, accelerate the future combat system, migrate the technologies from Crusader, which, in a number of instances, are impressive, into other systems and advance Excalibur and bring forward some precision munitions which, we believe, will have a significant effect on the battlefield.

SEN. SESSIONS: Well, I think it's important for the American people to realize that you have -- you're not cutting the defense budget. SEC. RUMSFELD: That's true.

SEN. SESSIONS: When you came to this office -- and you've recommended and presided over tremendous increase -- as a matter of fact, we were under 300 billion, I believe, when you took office. And it was up 40 billion, now up to 379 billion in two years, plus the supplemental that I'm not counting in there. So that's a tremendous advancement in our commitment to our national defense. But even with that, as you noted, we've got to pay for salaries and health care and overhead and all of those things. And even with that, we can't -- we don't have a dime to waste -- not one dime to waste.

SEC. RUMSFELD: Exactly right.

SEN. SESSIONS: And I don't know the perfect answer, but I know that this isn't a decision you made just in the last few days. You've been wrestling with this decision since the day you took office. There's been hearings and meetings and committees, and the Congress has known this program as being under review, as been (sic) several others. So --

Mr. Chairman, I'm glad we don't have the Congress meet down here and sit on that table to answer how we do our decision-making process. (Laughter.)

It's pretty good, all in all, all things considered, I think, the procedures you've utilized. So I would yield my time. Thank you, Mr. Chairman.

SEN. LEVIN: Thank you. A number --

SEC. RUMSFELD: May I make a couple of comments, Mr. Chairman? One, I do want to thank Senator Inhofe. He has invested an enormous amount of time in the Army and in artillery, and his comments and suggestions in my view have contributed to a constructive development of a record.

Second, I want to clarify one thing I said to him. I said to him that the data had come from the Army with respect to the airlift of 60 to 64 in one case and 50 to 64 in another. I double-checked it, and it turns out that the battalion information on operation and organization came from Fort Sill's draft plan for the Crusader battalion. It was meshed then with TRANSCOM's airlift-loading model to produce the data that I presented. That's where that came from.

Next, I think that -- we've talked a lot about what military people recommend, generals and admirals. And it's important what they recommend. And we care about what they recommend. I think the reality is that if any general or admiral is asked whether they would trade the capabilities this country has for the capabilities of some other country that may have a weapon that shoots farther or shoots more rapidly, and has to go up against the joint strike capability that our country has, I think there isn't a general with his head screwed on that would not in a second say he wouldn't trade ours for anybody's.

Next, I think it's important that we've spent this time on this subject, not because Crusader is the only thing that's important, but transformation is important. And it seems to me that if -- you have to ask the question, if not now, when? Is there nothing -- is there nothing that we're doing that we can ever stop? We have to be able to address important issue, get them up on the table, talk about them, and in an orderly, constructive way, come to some conclusions with respect to them. The choices are not easy.

President Bush is determined during his term to contribute to transformation of the armed services. I am determined to do so. When I was confirmed, I said I was not accepting his request that I serve as secretary of Defense to sit on top of the pile and tweak and calibrate what's going on. But I did believe things needed to be done, and I intended to make recommendations to the Congress and to work with the Congress to try to see that that's done.

And I would say, last -- several senators have mentioned it -- we simply have to care about the taxpayers' dollars. We -- we have an obligation, because, as Senator Sessions says, the dollars, as many as there are, and it's many, many billions of dollars, hundreds of billions of dollars, we still are not doing things we could be doing, we should be doing. We need more ships. We need a more modern aircraft fleet. And to think that we should be reluctant to make changes in programs and to not transform and to not modernize and take those steps, and instead to continue doing things that we might better not do, or is as attractive as they might be, might not be the very best way to do something I think would be unfortunate.

So I appreciate your taking the time to do this. I look forward to working with you to see if we can't leave a better military for our successors.

SEN. LEVIN: Just a couple of comments.

First of all, for the record, we will expect, Secretary Aldridge, your recommendation of April 29th, I believe, for the record.

Secondly, I would make part of the record a portion of the Army Inspector General's report, a redacted portion, but it addresses an issue which has been very troubling to many of us, and that is subparagraph B on page 45, which says the following -- and this is the Army's own Inspector General:

"The evidence established that the vice chief of staff of the Army, the VCSA, received a document from a defense contractor source on 30 April, 2002 which addressed the termination of the Crusader program. Prior to receiving this document, the Army was unaware of any proposed change to the Crusader program."

That's the Army's Inspector General that says prior to receiving a document from a contractor on April 30th, the Army was unaware of any proposed change to the Crusader program. That is a highly disturbing finding of the Inspector General.

SEC. RUMSFELD: If I'm not mistaken, I just -- if I may, on that subject, so it's part of the record right there, my recollection is that that occurred also before the deputy secretary advised me of his recommendation, or I advised the president of my recommendation.

SEN. LEVIN: Okay.

SEC. RUMSFELD: So the contractors were Johnny-on-the-spot.

SEN. LEVIN: Yeah. Well, there's one thing that we shouldn't let the contractors do or anyone else do with leaks, and that's drive public policy.

SEC. RUMSFELD: That's right.

SEN. LEVIN: And I think what troubles me process-wise here the most is that after there is a process put in place that says we're going to look at the pros and cons and the alternatives for 30 days, that because something is leaked to the press, that then suddenly there is a change of course and a policy decision is made that had not previously been made. We cannot allow leaks to drive policy in this town, or else we're all going to be driven crazy, because leaks occur every single day, and we will make some bad policy decisions because leaks are a way of life around this place.

So I think that when you acknowledge that it was leaks to the press that suddenly truncated that 30-day process, that what you are saying to us is that we're not going to let that 30-day process finish, where the pros and cons are completed, where the alternatives are looked at. And tough decisions are made tougher when that happens. There's no doubt these are tough decisions. But they're made a lot tougher when there's a process put in place, where the alternatives are supposed to be looked at, then a decision is supposed to be made, then there's a leak, and boom! That's it, we're now making a decision, and that's the end of that.

Well --

SEC. RUMSFELD: Mr. Chairman, if I might just say --

SEN. LEVIN: No, no. If not -- I'm going to have to bring this to an end. I think everyone -- I think you've had plenty of time to comment. I mean, someone's got to have to have a last word here that's going to --

SEN. WARNER: Well, I'd like to have a word.

SEN. LEVIN: You can have a word. (Laughter.)

In that case, since I'm the chairman, I'm going to have the last word, so I'll finish after Senator Warner.

SEN. WARNER: No. But, Mr. Chairman, I think we've had a very good hearing.

I approached you on the seriousness of this matter. Our dear colleague over here, we met as late as yesterday afternoon on the -- how we would put this hearing together.

So in every way that you -- I think it's been eminently fair, which is your style, for your members to get the facts out, and we've built a good record, and we'll have to assess that record.

Mr. Secretary, I was impressed with your concluding remarks. We always have to be conscious of that taxpayer.

But to you, my good friend, contractors have freedom of speech, and I don't think they drive policy, but they are the ones that so often are looked at with -- they are the ones that are building the equipment that are equipping the armed forces of America today. And I value some of their views and some of their expertise and frequently call upon it. They will not have the final say with me, but I wish to go on record that they're a vital part of our defense structure. And the industrial base is something we're constantly concerned about.

MR. WOLFOWITZ: I just want to say what drove our decision on timing was the need to get information to this committee in a timely way for your deliberations, and a decision that we could do so, and we have been able to do so.

Let me now have the final, final word. One other thing for the record, and that has to do with the cancellation costs. We're going to need more information on that. And would you give us, to the best of your ability, for the record, the comparison of cancellation costs if cancelled now, compared to if terminated at or after Milestone B? I know there's negotiations that have to take place that affect that, but I think you can give us a range of the likelihood of those costs. We've been informed, and I don't know that it's accurate that termination costs would be significantly higher now than they would be if we went to a Milestone B. That may or may not be true, but we need some information on that point because the taxpayer dollars are critically important, and we want to make sure that every dollar that is spent for defense will make us stronger.

Mr. Secretary, you and your colleagues have been here a long time today. We appreciate your being here. We appreciate you, Secretary Wolfowitz, Secretary Aldridge, for all the work you do. And we will now move to our second panel.